Tax measures approved under the Finance Act for fiscal 2026-27 have strengthened Bangladesh’s capital market outlook by improving investor returns, encouraging new listings and removing barriers to mutual fund investment, according to a United Securities Ltd (USL) research note.
USL said the package delivers broad tax relief for individual and institutional investors, listed companies and professionally managed investment funds.
The biggest gain comes from a flat 15 per cent tax on individual dividend income. It replaces the previous slab-based regime, under which top-income earners paid up to 30 per cent.
USL said the lower rate improves after-tax returns from dividend-paying stocks and could encourage listed companies to distribute higher dividends.
The Finance Act also retains the preferential 20 per cent tax on corporate dividend income. That reverses an earlier proposal to tax such income, including that earned by banks, at the standard corporate rate. USL said the decision removes a major concern for institutional investors.
The Act also removes the Tk5 lakh ceiling on mutual fund investments eligible for tax rebates. Mutual funds invest pooled savings through professional fund managers. USL said lifting the cap should attract more retail investors, making fund governance and management quality more important in winning investor confidence.
Another key reform replaces the previous listing incentive with a three-tier corporate tax rebate. Companies now receive a 2.5 percentage-point tax cut immediately after listing, without the earlier requirement to float at least 10 per cent of their shares.
A further 2.5 percentage-point rebate is available for companies offering at least 10 per cent public shareholding. Another 2.5 percentage-point rebate rewards companies that conduct all transactions through the formal banking system, whether listed or not.
The government also restored the tax exemption on zero-coupon bonds, which are issued at a discount and redeemed at face value on maturity. The exemption had been withdrawn in the original FY27 budget proposal.
USL said the combined measures make dividend stocks more attractive, strengthen incentives to list on the stock exchange and support deeper capital market development.
