Allow black money in stock investments: Merchant bankers

Merchant bankers have tabled five issues for consideration, such as allowing investments of black money in stocks in the national budget for the next fiscal year, saying policy support is necessary to make the capital market vibrant.

At a discussion titled "Budget 2022-23: Capital Market Perspective", the leaders of the Bangladesh Merchant Bankers Association (BMBA) said despite the progress of the country's economy, the capital market is depressing.

If the capital market can be made dynamic, the country's economy will also become dynamic, they added at the event jointly organised by Capital Market Journalists Forum (CMJF) and BMBA on Wednesday.

"The government's policy support is needed to make the capital market dynamic. It is not possible to make the market dynamic without this support," said BMBA President Sayedur Rahman.

Sayedur Rahman asked for a scope to invest black money in the capital market with a 5% tax, to increase the depth of the market. The liquidity crisis will also end, he added.

State Minister for Planning Shamsul Alam agreed with BMBA's demand to allow black money to be invested in the capital market once again to deepen the market.

The association wants at least a 15% corporate tax gap between listed and non-listed companies, an increase from the existing 7.5%.

BMBA's argument in this regard is that many good companies are not coming to the capital market due to the small tax gap, they are doing business with bank loans.

There are some additional costs involved in getting to the capital market, so there is a need to raise the corporate tax gap, it added.

The association also called for reducing the tax rate of merchant banks from 37.5% to 27.5% like that of a company.

The association says the value-added tax (VAT) rate for listed companies remains the same, which needs to be reduced to 10%.

CMJF President Ziaur Rahman presided over the discussion.