Merchant bankers yesterday demanded reduction of corporate tax on merchant banks, which are non-listed companies, to 35 per cent in the next fiscal (2014-15) from the existing 37.50 per cent.
Leaders of Bangladesh Merchant Bankers Association (BMBA) placed the demand at a post-budget press conference at Purbani Hotel in the city yesterday. They also demanded stimulus package for small investors in the stock market and treating provisioning and write-off loss as tax deductible. BMBA vice president Md Akter Hossain Sannamat read out the proposals at the press conference while BMBA president Tanjil Chowdhury, BMBA secretary general Md Moshiur Rahman, executive committee member Md Moniruzzaman, among others, were also present.
In the proposed budget for 2014-15, the government reduce the corporate tax rate of non-listed companies to 35 per cent from the present 37.50 per cent, Md Akter Hossain Sannamat.
Among the capital market institutions, asset management companies are in 27.50 per cent tax bracket whereas stock brokers will have to pay 35 per cent, he said adding that only merchant bankers will have to pay 37.50 per cent taxes although they are the biggest sufferers in the stock market crash.
Even though merchant banks are also non-listed companies, the corporate tax rate of such companies remained unchanged at 37.50 per cent in the proposed budget for 2014-15, Sannamat said.
Merchant bankers are passing through serious financial troubles because of debacle in the country’s capital market, he said adding that many of the merchant banks will have to show losses in their income statement.
Thus, the government should also reduce the corporate tax of merchant banks to 35 per cent in the next fiscal from the present 37.50 per cent, the BMBA vice president said. Besides, such a reduction will not affect the government’s revenue collection, he thinks.
As per the government’s instruction, the merchant banks waived 50 per cent interest on account of affected small investors in the share market crash, he said.
Although the National Board of Revenue was supposed to treat the 50 per cent interest as ‘tax allowable expenses’ according to the instructions of Ministry of Finance, the interest is yet to be treated as allowable expenses, he said.

The Independent/18-Jun-2014