Written by The Banking Post
To ensure stability, increase investment, and promote long-term growth in the country’s capital market, the DSE Brokers’ Association of Bangladesh (DBA) has submitted a series of proposals to withdraw the double taxation system in the 2026-2027 national revenue budget.
In a letter sent Wednesday to NBR Chairman Md. Abdur Rahman Khan, DBA President Saiful Islam highlighted that implementing these proposals would strengthen investor confidence, encourage new listings, and attract both domestic and foreign investment, positively impacting the overall economy.
Currently, individual investors face double taxation on dividend income—tax is deducted at source and then again in income tax returns, often pushing the effective tax rate to 40.5%. DBA said this discourages cash dividend declarations by sponsors and directors and deters high-net-worth investors from dividend-based investments. The association proposes treating source-tax on dividends as the final tax liability to simplify the tax system and reduce the burden of double taxation.
DBA also emphasized removing tax inequities in the mutual fund sector. Presently, a maximum investment limit of BDT 500,000 is eligible for tax exemption, discouraging retail investors. The proposal suggests extending the exemption to any investment amount to increase institutional participation and ensure stable fund flows in the market.
The association recommended a uniform 15% tax on capital gains across listed securities and mutual fund units to eliminate current disparities in taxation.
Regarding stock turnover, DBA suggested treating TDS deducted at source as advance tax instead of minimum tax, allowing brokers to adjust taxes based on actual income and easing pressure on brokerage houses.
To support loss-making investors, DBA proposed tax relief on negative equity accounts, full exemptions on interest waivers, cash dividends, and capital gains, and removal of the existing BDT 1 million limit, enabling affected investors to re-engage with the market.
DBA also suggested a “Dimmed-to-Be Listed Company” framework to encourage large companies to participate in the market, allowing firms with certain capital, turnover, or bank loans to qualify. Policy incentives for fundraising through bond issuance were also recommended.
To restore market discipline, DBA proposed revoking tax benefits for inactive listed companies that have failed to hold AGMs or declare dividends for three consecutive years, applying the same tax rate as unlisted firms.
The association believes that these measures would enhance market transparency, depth, and long-term investment, ultimately restoring confidence in Bangladesh’s capital market.
