UNB, Dhaka :
The country’s merchant bankers on Tuesday demanded reduction of corporate tax to 35 percent from existing 37.50 percent to help small investors in the stock market.
“We appreciate overall reduction of corporate tax to 35 percent. But the merchant bankers, which also operate as company, are kept out of such tax reduction benefit,” Tanjil Chowdhury, president of Bangladesh Merchant Bankers Association (BMBA), said at a press conference at Hotel Purbani in the city.
The BMBA also placed two more demands-providing stimulus package for small investors in the stock market, and treating provisioning and write-off loans as tax deductible.
Tanjil Chowdhury said the merchant bankers are non-listed companies. So, they should get the benefit of the corporate tax reduction announced in the proposed budget for fiscal 2014-15.
He said the merchant bankers have been passing through serious financial crisis because of share market debacle. Many of the merchant banks will have to show huge losses in the income statements.
“But if our tax is reduced to be at 35 percent, there will be no effect on the government’s revenue collection,” he added.
The BMBA president mentioned that among the capital market institutions, currently asset management companies’ tax is 27.50 percent, stock brokers’ tax is 35 percent while only the merchant bankers have to pay 37.50 percent tax though they are the biggest sufferers in the capital market crash.
About the stimulus package for small investors, the BMBA said the merchant banks waived 50 percent interest on margin loans disbursed against their clients’ portfolios in 2011 as per the government’s instruction for the sake of implementing the capital market refinancing scheme.
He said the National Board of Revenue was supposed to treat the 50 percent interest as allowable expenses in accordance with the government’s assurance.
“But the interest is yet to be treated as allowable expenses. That’s why we have urged the government to incorporate this facility in the budget of the FY 2014-15,” the BMBA president said.
The BMBA has also urged the government to consider the written-off amount of loan and interest as allowable expenses under income tax ordinance.
“Otherwise, the merchant banks will have to sustain a colossal loss due to huge amount of unrealised margin loans worth around Tk 100 billion,” it said.
BMBA vice president Md Akter Hossain, secretary general Moniruzzaman and other leaders of the association were present at the press conference.
