What the Budget May Offer for the Capital Market
- Update Time : 09:19:32 am, Monday, 2 June 2025
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On Monday, June 2, Dr. Salehuddin Ahmed, the Finance Advisor, is scheduled to present the proposed national budget for the 2025–26 fiscal year. He will deliver the budget speech at 3 PM via Bangladesh Television. The upcoming budget is expected to include several proposals related to the capital market, potentially offering positive impacts.
One likely proposal is to widen the tax rate gap between listed and non-listed companies by 2.5 percentage points, bringing the total difference to 7.5%. Currently, this gap stands at 5%, down from 10% in earlier years. Increasing this differential could incentivize more quality companies to enter the stock market.
There is also a proposal to reduce the corporate tax rate for merchant banks by 10%. Despite not being conventional banks, these institutions currently pay taxes at the same rate as banks—37.5%. If the proposal is implemented, the new rate would be 27.5%, which could provide relief to merchant banks struggling under prolonged market downturns.
Additionally, the budget may address the demand of stockbrokers by proposing a reduction in the tax deducted at source (TDS) on trading transactions. The current TDS rate is 0.05%, and the proposal suggests lowering it to 0.02%, which could ease the burden on many brokerage firms in a low-volume market.
While stakeholders have called for the removal of capital gains tax on both individual and institutional investors, there has been no confirmation that this demand will be met in the new budget.
