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The Chittagong Stock Exchange (CSE) has urged the government to introduce stronger tax incentives in the final FY27 budget to attract more companies to the capital market and increase the supply of quality securities.

At a post-budget briefing in Chattogram on Sunday, CSE leaders proposed a three-year tax exemption for newly listed companies and called for widening the tax gap between listed and non-listed firms to at least 10 percentage points, up from the current 5 percentage points.

CSE officials said a wider tax differential would make stock market listing more attractive for private companies, improve corporate disclosure standards and ultimately support higher government revenue through better compliance.

The exchange also argued that tax relief for newly listed firms would help reduce the initial cost burden of going public, encouraging more unlisted companies to raise funds through the capital market. A broader listing base, it said, would improve market liquidity and reduce volatility.

CSE also opposed the proposed budget measure to replace the existing 20 per cent tax on dividend income for institutional investors with their applicable corporate tax rate, warning that the change could discourage institutional participation in the market.

“We suggest withdrawing this proposal and retaining the existing 20 per cent tax rate,” CSE Managing Director Shaifur Rahman Mazumdar said.

The exchange further expressed concern over the proposed withdrawal of tax benefits on zero-coupon bonds, saying such a move could slow the development of Bangladesh’s corporate bond market. It urged the government to reconsider the decision in the final budget.

CSE also sought a five-year tax holiday for the country’s upcoming commodity exchange, noting that significant investment is required to build a world-class, technology-driven marketplace.

According to the bourse, preparations for launching Bangladesh’s first commodity exchange are largely complete, pending final regulatory approval. The platform is expected to begin as a derivatives market focused on futures contracts, initially offering products linked to gold, silver and crude palm oil.

The exchange also highlighted plans to introduce new instruments such as REITs, ETFs, index hedging and currency hedging products to diversify the financial ecosystem.

Despite its concerns, CSE welcomed several capital market-friendly measures in the proposed budget, including faster settlement cycles and steps to encourage greater participation from pension funds, insurers and mutual funds.

CSE Chairman AKM Habibur Rahman said the exchange would continue working with regulators and policymakers to support reforms aimed at building a more transparent, technology-driven and investment-friendly capital market.