DBA Seeks Full Capital Gains Tax Exemption Until 2030

The DSE Brokers Association of Bangladesh (DBA) has sought a full tax exemption on capital gains earned by individual and foreign investors from listed securities, in a bid to restore investor confidence in the capital market. The association proposed that the exemption run until the Central Counterparty Bangladesh Limited (CCBL) begins full operations — that is, until 2030.

The DBA submitted the proposal on Wednesday (October 28) to Finance Minister Amir Khasru Mahmud Chowdhury, the prime minister's special assistant for investment and capital market affairs Tanvir Shahriar Gani, Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan, and National Board of Revenue (NBR) Chairman Ahsan Habib.

The association disclosed the information in a press release on Saturday (October 31).

At present, individual investors receive a tax exemption on capital gains from listed securities up to Tk 50 lakh. Gains above that amount are generally taxed at 15 percent.

Alongside restoring a full exemption for individual investors, the DBA proposed reconsidering the tax regime for foreign individual and institutional investors. It favoured keeping the existing tax regime in place for sponsors, directors and institutional investors.

The proposal says the relevant provisions of the Income Tax Act, 2023 could be amended to exempt capital gains from eligible transactions executed through a stock exchange and settled through the designated central depository system.

According to the DBA, the move would increase trading in the capital market, encourage reinvestment of gains, and increase the productive use of domestic savings. It would also expand equity financing opportunities for listed companies, the association believes.

The association added that once the CCBL begins full operations, determining capital gains and calculating the tax on them will become easier. It was on that consideration that the exemption was proposed for the period until the CCBL's full launch.

DBA President Saiful Islam said an investment-friendly tax regime for individual and foreign investors would increase confidence and long-term investment in the capital market. It would also expand financing opportunities for listed companies and help implement the government's capital market development plans, he said.

The DBA urged the relevant government authorities to consider the proposal seriously and take the necessary policy and legal steps. It also pledged to continue cooperating with the government, regulators and all stakeholders for the development of the capital market.