June 13, 2007

Proposed Budget reinvigorates Capital Market. CSE in reaction after budget announcement

CSE hailed the government for presenting “a balanced and growth oriented budget’ for the fiscal year 2007-2008 indicating that for the first time due emphasis on the development of country’s capital market has been given in the budget.”

“We express our heartfelt felicitation for presenting such a balanced budget showing visions for the future growth of the country, especially for understanding the need for increasing the supply of securities.” CSE also praised government’s clear direction about offloading it’s shares of a number of state-owned companies through share market. CSE also welcomes government’s steps of reduction of tax encouraging the private sector telecommunication companies to go public.

CSE also lauded the budget that brings changes in the income tax structure including increasing the exemption limit of income tax for an individual to Tk. 1.50 lakh from Tk. 1.20 lakh, offering tax holiday for solar energy plants, allowing rebate for the non resident Bangladeshi, considering 5 percent of transfer to Statutory Reserve of financial institutions as allowable expense instead of 10 percent, abolishing advance tax on government bonds, exemption of income generated from Zero-coupon Bond from income tax.

CSE has urged further to consider the following proposals which may bring positive growth in the capital market: i) Framing policy to channel funds such as Pension, Provident and Gratuity into Stock Market ii) Deduction of tax at source from the dividend payable by the registered company should be completely waived iii) Deduction of Tax at source from the Trade value of the Stock Brokers should be reduced to 0.010% from 0.015% iv) All Infrastructure Developing Companies operating in Bangladesh should be in the form of Public Limited Company and be listed with Stock Exchange v) Simplification of the operational process of NITA account to attract NRBs in investing in the capital market.

_____________
AKM Shahroze Alam
Deputy Manager
Corporate Development