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A total of 209 publicly traded companies now have to pay a tax of Tk10,792 crore as the government has proposed to impose 15% tax on excess reserve exceeding 50% of the company’s paid up capital.
According to Dhaka Stock Exchange (DSE) data, there are 312 companies listed with the prime bourse, of which 209 has excess reserve over 50% which stood at Tk25,952 crore. Total reserve of 209 companies sum up to Tk97,901 crore.
In the budget for FY2019-20, the government proposed a 15% tax on the reserve, of a publicly traded company, which is over 50% of its paid up capital.
As per the budget proposal, Titas Gas, a state owned gas distribution company, has to pay a tax of Tk762 crore, the highest amount, as it has excess reserve of TK5,080 crore as of now. Paid up capital of Titas Gas is at Tk989 crore.
On the other hand, Beximco has to pay Tk722 crore followed by Square Pharmaceuticals Tk665 crore, Islami Bank Tk397 crore, and British American Tobacco Ltd Tk333 crore.
On June 13, Finance Minister AHM Mustafa Kamal placed the national budget proposal for FY2019-20 before the parliament.
A 15% tax has been imposed on stock dividend distributed to the shareholders by any listed company in the proposed budget.
To encourage the distribution of cash dividends, the finance minister proposed imposing 15% tax on stock dividend distributed to the shareholders by any listed company, and 15% additional tax on that much of retained earnings, and reserves when it would exceed 50% of the paid up capital of the company.
“The reserve money does not belong to the board of directors only, but to all shareholders. Therefore, imposing a tax on the reserve will affect all shareholders. The government would refrain from imposing such taxes,” Stock market expert, and former Dhaka University teacher Professor Abu Ahmed told this correspondent.
Meanwhile, Bangladesh Association of Publicly Listed Companies (BAPLC) in a statement urged the government to withdraw its decision to impose the 15% tax on retained earnings and reserve, saying the move will be unjustified for the shareholders.
This is the first budget since the Awami League government took charge for the third consecutive term, after winning the general election on December 30 last year.
source (DT)
