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The government has proposed exemption in capital gain tax applicable at the time of transferring property to trust and Special Purpose Vehicle, and vice versa.
The waiver of 4.0 per cent gain tax has been included in the proposed budget for the fiscal year (FY) 2021-22 with a view to making Sukuk or Islamic bond popular and creating a strong bond market.
“If endorsed, this will facilitate collecting long-term capital and reduce bank dependency,” the finance minister said in budget speech.
He said the facility will also add impetus to the economic activities by developing bond market, which, in turn, is expected to have a positive impact on development and growth of infrastructure and capital-intensive industries.
Meanwhile, the securities regulator approved rules namely the Bangladesh Securities and Exchange Commission (Debt Securities) Rules, 2021 to pave the way of long term financing through dent securities including the Sukuk.
A gazette notification has also been published on the rules approved by the securities regulator.
Beximco recently has also decided to issue Sukuk bonds worth Tk 30 billion for the purpose of construction of solar projects and financing and refinancing the machinery and equipment required for expansion of Beximco’s textile division.
Beximco Pharmaceuticals chief financial officer Ali Nawaz on Monday told the FE that said the demand for Sukuk is increasing in Bangladesh as many sharia-compliant investors do not want to receive interest.
“The waiver of taxes will attract investors in this instrument. Unless tax exemption, Islamic finance would not be workable.”
(FE)
