The existing tax exemption benefit for stockmarket investors will continue, even though their income is above the threshold limit, finance minister AMA Muhith said in his budget proposal on Thursday.
The minister also proposed that such investors would not to be required to produce any tax identification number (TIN). “Our government is determined to ensure growth and stability of the capital market. For this reason, I propose continuation of the existing tax exemption benefits to investors,” said Muhith. He sees the recent capital market collapse as a market correction and blamed the concerned organisations’ failure to check it and interventions from outside. The minister also pointed to the 192 per cent rise in market capitalisation in a span of only two years. “Recently, share prices have been corrected in the backdrop of a continuous rise in price-index and market capitalisation in the last two years,” the minister elaborated. He said the market capitalisation stood at 17 percent of the GDP in January 2009, while it increased up to 28 percent in the same month of 2010 and 44 percent the month this year.
“The 192 percent rise in market capitalisation in two years time was not desirable. There had been failures on the part of relevant quarters and also interference from outside,” Muhith said. He said consequently towards the end of January 2011, the market capitalisation plummeted to 40 percent of GDP. “This basically brought about market correction,” he said, pointing out that many termed it as a catastrophe.
The minister expressed his sincere thanks to the members of the capital market investigation team who produced its report within a very short span of time. “The government has taken steps to implement most of the recommendations made in the report.” The minister also listed the measures taken to improve the capital market situation, which includes setting up of Bangladesh Institute of Capital Market and developing surveillance software in the Securities and Exchange Commission (SEC).
He said the amendment of different rules, including SEC Act, is now under way, aiming to avert any misuse of book-building method.
The minister expressed his sincere thanks to the members of the capital market investigation team who produced its report within a very short span of time. “The government has taken steps to implement most of the recommendations made in the report.” The minister also listed the measures taken to improve the capital market situation, which includes setting up of Bangladesh Institute of Capital Market and developing surveillance software in the Securities and Exchange Commission (SEC).
He said the amendment of different rules, including SEC Act, is now under way, aiming to avert any misuse of book-building method.
Besides, the minister laid bare plans to establish a separate clearing and settlement company to settle stock exchange transactions within the shortest possible time, and a Financial Reporting Council to oversee audit and accounting standards of the organisations listed on the country’s two bourses.
Source: The Independent.
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