FE REPORT |
Published: February 03, 2021 9:53 a.m.
| Updated: February 03, 2021 9:55:16 AM
The securities regulator will propose a corporate tax gap of 15 percent between listed and unlisted companies in the next budget in order to attract more companies to the capital market.
The chairman of the Bangladesh Securities and Exchange Commission (BSEC), Prof. Shibli Rubayat Ul, said this during a press conference on Tuesday at the BSEC premises.
The briefing was part of a BSEC roadshow in Dubai on February 9th on the Bangladeshi capital market.
“We are aiming for a corporate income tax gap of 15 percent for listed and unlisted companies in the upcoming budget. We will make a proposal for this purpose,” said Prof. Islam.
Previously, there was a corporate income tax gap of 10 percent, as unlisted companies paid 35 percent tax against 25 percent of listed companies.
Under the 2020-21 budget, the gap narrowed to 7.50 percent as the government cut taxes on unlisted companies by 2.5 percent to 32.50 percent.
Experts criticized the decision because the unlisted companies would not be interested in an IPO given the tax advantages offered to them.
“The corporate tax gap needs to be widened to encourage the listing of multinational companies that lose interest in going public after the tax gap is reduced,” said Prof. Islam.
He said the cost of compliance for multinational companies (MNCs) will increase 2.0 to 3.0 percent when listed on exchanges.
“… In addition, they do not need the funds that must be raised by the market. Therefore, tax incentives should be offered for the listing of the multinational companies.”
The BSEC chief said multinational companies will be interested in going public if a corporate tax gap of 15 percent is guaranteed.
After a regulatory move, three banks are in the pipeline to further expand the capital market, he announced.
South Bangla Agricultural and Commercial Bank has already submitted its Initial Public Offering (IPO) proposal and two more will be submitted shortly.
Speaking at the Dubai roadshow, Prof. Islam said the Securities Commission will hold similar shows in different countries targeting their financial districts.
“We will be holding road shows in London, Rome, Toronto, New York, Hong Kong, Singapore, Sanghai, Tokyo and Malaysia to attract foreign investors and non-resident Bangladeshis,” he said.
A Swiss investment bank, Credit Switch, will also hold a roadshow with its own fund.
The managing director of the BSEC, Md Mahbubul Alam, and its spokesman, Mohammad Rezaul Karim, also spoke at the briefing.
The Securities Commission will hold a four-day roadshow entitled “The Rise of the Bengal Tiger: Potential of the Bangladeshi Capital Market in Dubai”.
The program opens on February 9th and closes on February 12th at Park Hyatt Dubai.
Two summits on the Bangladeshi capital market as well as bilateral and multilateral meetings will also be held at the fair.
The regulator will also hold two more programs to open up new investment opportunities and leeway for private equity and venture capital investments.[email protected]