‘Capital gain tax’ withdrawn30 June 2014
A proposal to tax profits made in the stock market has been scrapped in the new budget.
The capital gain tax has been withdrawn to help the wobbling capital market flourish.
Finance Minister AMA Muhith in his closing budget speech on Saturday said the step was taken in keeping with the prime minister's proposal.
"The prime minister has recommended keeping the income from stocks free of tax to help the market flourish and encourage investment," he said.
The government has taken a slew of measures to revive the capital market that has been on a downward spiral since the 2011 debacle.
It proposed a five-year tax exemption for the bourses and raised the tax-free dividend income ceiling for individuals from Tk 10,000 to Tk 15,000 to bring back investors. In the proposed 2014-15 budget, Muhith recommended a 3 percent capital gain tax on market profits ranging from Tk 1 million to 2 million, and 5 percent on profits over Tk 2 million.
The minister on Saturday proposed increasing the tax-free profit margin and 10 percent tax rebate for listed companies which provide 30 percent or more dividends instead of 20 percent.
Later the 2014 finance bill was passed in presence of the opposition party.
The new fiscal starts on July 1.