Dhaka, Bangladesh (BBN): The upcoming 2013-14 national budget is likely to offer a number of tax benefits to help revamp the moribund capital market through luring investors.
The last budget of the incumbent government, to be announced on next Thursday, is expected to make a level-playing field in terms of tax benefits in case all mutual funds as the budget is likely to offer a 10 per cent tax rebate on dividend income for all mutual funds.
The budgetary measures are also likely to withdraw existing 0.05 per cent tax at source from brokerage houses and exempt the current three per cent tax on premium value of shares.
For encouraging long-term investment, the budget is expected to lower the gain tax to five per cent from the current rate of 10 per cent to benefit the long-term investors. Presently, the companies and firms pay 10 per cent tax on capital gains.
The budget may raise higher the ceiling of tax-free dividend income from BDT5,000 to BDT10,000, it is learnt.
The existing 5.0 per cent tax at source on savings instruments is likely to be withdrawn in the budget to attract more savers to savings tools and lessen the over-dependence of the government on the banking sector to finance its budget deficit.
A special fund worth BDT 9.0 billion is likely to be announced in the budget speech for investment in the capital market.
BBN/BB/AD/03June-13-11.25am (BST).