The DSE Brokers Association of Bangladesh (DBA) has sought a complete tax exemption on capital gains earned from listed securities by individual and foreign investors until 2030. The organisation submitted the proposal to restore investor confidence, boost market turnover and liquidity, and encourage long-term investment in the capital market.
The proposal was submitted on Wednesday to Finance Minister Amir Khosru Mahmud Chowdhury, Special Assistant to the Prime Minister on Investment and Capital Markets Tanveer Shahriar Goni, Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan, and National Board of Revenue (NBR) Chairman Ahsan Habib.
Capital gain refers to the profit earned from selling shares- for instance, if an investor buys a share of a company at Tk100 and sells it at Tk150, the capital gain per share stands at Tk50.
Under the DBA’s proposal, the existing tax exemption limit for individual investors on capital gains from listed securities should be withdrawn to render the entire profit tax-free, while the tax system imposed on capital gains of foreign individual and institutional investors should be reconsidered.
Under the current tax structure, individual investors enjoy a tax exemption on capital gains from listed securities up to Tk50 lakh, with profits exceeding this threshold generally taxed at a rate of 15 per cent. The DBA noted that replacing this structure with a full tax exemption would enhance investment interest in the capital market and encourage investors to reinvest their earned profits back into the market.
The proposal suggested amending relevant provisions of the Income Tax Act, 2023 to make capital gains tax-free on eligible transactions conducted through stock exchanges and settled under the designated central depository system. However, the DBA favoured maintaining the existing tax system for company sponsors, directors, and institutional investors.
According to the organisation, introducing such tax benefits would increase stock market trading volume and create opportunities for the productive deployment of domestic savings. It would also expand equity financing opportunities for listed companies, thereby encouraging them to raise capital from the stock market.
Explaining the rationale for fixing the exemption period until 2030, the DBA highlighted the commencement of operations of the central counterparty system.
The organisation expects that the full-scale operationalisation of Central Counterparty of Bangladesh Limited (CCBL) will simplify the process of capital gain determination and tax calculation. Consequently, it recommended keeping the tax exemption effective until CCBL is fully operational, namely up to 2030.
DBA President Saiful Islam said that ensuring an investment-friendly tax structure for individual and foreign investors would boost investor confidence in the capital market. He added that this would promote long-term investment while expanding financing opportunities for listed companies, and play a supportive role in implementing government plans for stock market development.
The DBA urged the relevant government authorities to give serious consideration to the proposal and take necessary policy and legal measures. The organisation also expressed its commitment to maintain ongoing cooperation with the government, regulatory agencies, and all relevant stakeholders to foster the development of the capital market.
