NBR chairman slams bourses, CDBL for not listing

National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan yesterday slammed the country’s two premium bourses and the sole securities depository for failing to go public, despite more than a decade having passed since demutualisation.

He expressed his frustration on the matter in a pre-budget meeting with stock market stakeholders held at NBR’s auditorium in the capital.

Demutualisation happened in 2013, he said, and the Dhaka Stock Exchange (DSE) should have offloaded shares in the stock market right afterwards.

The Chittagong Stock Exchange (CSE) and Central Depository Bangladesh Ltd (CDBL) should have done it too, he said. However, all three remain unlisted.

“Why haven’t you (DSE, CSE, and CDBL) been listed yet?” he posed the question at the meeting.

The government has made significant efforts to encourage firms to increase share offloading, but many firms could not even secure a 5 percent stake, he said.

“In Bangladesh, companies have even been listed by offloading as little as 1 percent of shares. As a citizen, I feel ashamed of this.”

Such listings, he warned, create room for price manipulation rather than genuine capital formation.

In the event, DSE proposed allowing a five-year tax-free provision on interest of asset-backed bonds, Sukuk and green bonds for investors except banks, insurance and non-bank financial institutions.

For these investors, the 10 percent source tax should be the final tax, the prime bourse proposed.

Non-resident investors’ tax on capital gains should be exempted for five years, it added.

The CSE proposed a five-year tax exemption benefit for its commodity exchange segment to facilitate its launch and promotion.

The DSE Brokers’ Association of Bangladesh proposed announcing source tax on cash dividends as the final tax.

They also suggested the NBR propose a tax structure where a company would be deemed listed if its paid-up capital crosses Tk 500 crore, or yearly turnover crosses Tk 1000 crore, or the company’s bank loan is above Tk 500 crore.

A stronger tax differential between listed and non-listed companies is necessary to motivate corporations to enter the capital market, said the Bangladesh Merchant Bankers Association.

To encourage IPO activity, companies which got listed before 2030 should receive temporary tax relief, the association proposed. For instance, in the first three years, corporate tax can be reduced by 50 percent, and in the next two years by 25 percent.