The DSE Brokers Association of Bangladesh (DBA) has sought a complete exemption from capital gains tax on listed securities for individual and foreign investors until 2030, arguing that the relief would restore investor confidence, boost trading and liquidity, and encourage long-term investment.
The association submitted its proposal on Wednesday to Finance Minister Amir Khosru Mahmud Chowdhury, Prime Minister’s Special Assistant for Investment and Capital Market Affairs Tanvir Shahriar Ghani, Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan and National Board of Revenue (NBR) Chairman Ahsan Habib.
However, analysts have called the demand unfair, arguing that stronger governance, rather than tax concessions and subsidies, is needed to restore confidence and ensure sustainable market growth.
Capital gains are profits from selling shares above their purchase price. For example, a share bought for Tk100 and sold for Tk150 yields a Tk50 gain. Currently, individual investors enjoy a tax exemption on gains of up to Tk50 lakh from listed securities, with gains above that threshold generally taxed at 15 per cent.
The DBA wants the ceiling removed to make all such gains tax-free for individual investors. It also proposes reviewing the tax treatment of foreign individual and institutional investors, while retaining existing arrangements for company sponsors, directors and institutional investors.
The association argues that the relief would attract investors, encourage reinvestment and boost trading. It could also channel domestic savings into productive investment and help listed companies raise equity capital.
The proposal seeks amendments to the Income Tax Act, 2023, to exempt gains from eligible stock exchange transactions settled through the designated central depository system.
The DBA wants the exemption to continue until 2030, when Central Counterparty Bangladesh Limited (CCBL) is expected to become fully operational, simplifying capital gains calculations and tax assessments.
DBA President Saiful Islam said an investment-friendly tax regime would restore confidence, encourage long-term investment, expand financing opportunities for listed companies and support the government’s capital market development plans.
The association urged the government to take the necessary policy and legislative measures and pledged continued cooperation with regulators and other stakeholders.
Backing the proposal, Bangladesh Securities and Exchange Commission (BSEC) Executive Director and Spokesperson Md Abul Kalam told TIMES of Bangladesh that incentives could attract investors and benefit the market. He said BSEC would recommend the proposal to the National Board of Revenue (NBR), leaving the final decision to the NBR and the government.
However, North South University School of Business and Economics Dean AKM Waresul Karim rejected the demand as unfair, arguing that investment should be driven by the merits of securities rather than tax benefits.
He warned that removing the tax could attract investors seeking to avoid taxation rather than invest on merit, further disadvantaging poorer people. He also claimed that such exemptions were not offered elsewhere in the world and called for stricter measures on the wealthy.
The DBA, however, maintains that it is not opposed to capital gains taxation but wants temporary relief to bring investors back.
DBA President Saiful Islam said the market’s poor performance over the past 15 to 16 years had devastated ordinary investors, with beneficiary owner (BO) accounts falling from 33 lakh to 16 lakh.
“If investors were making profits, their numbers would not have declined. The market has suffered deep damage. We need to bring those investors back,” he said.
Saiful also criticised the disparity in government support for the banking sector and the stock market, claiming that banks had received financial assistance while the stock market had been denied similar support.
He claimed that banks affected by misappropriation of depositors’ funds were being kept operational through mergers involving Tk35,000 crore, allowing depositors to recover their money, while the stock market received no comparable support.
“Instead, one law after another is being introduced, and regulations are becoming stricter. We are unable to attract investors,” he said.
Saiful further claimed that capital gains were not taxed elsewhere except Singapore. He argued that the tax created complications, discouraged major investors and contributed to daily market turnover remaining below Tk500 crore.
He said the DBA therefore wanted capital gains taxation for individual investors postponed until Central Counterparty Bangladesh Limited became fully operational.
He also questioned the government’s revenue benefit from the existing tax, given the Tk50 lakh exemption threshold and the difficulty investors face in earning profits.
“The government will not earn much revenue from this sector. Making profits in this market is extremely difficult. There are hardly any investors making profits,” he said.
