Professor Shibli Rubaiyat-ul-Islam
Industry Report: The economy of the country has huge potentials. There is no alternative to increase investment and employment to exploit this potential. The government is also serious about this. But long-term stable policy is necessary to increase investment.
Because, changing business laws, various policies and facilities repeatedly is against the interests of entrepreneurs and investors. This issue should be taken into account in the budget of the financial year 2023-24. Besides, to increase the tax collection, the tax coverage should be increased without putting pressure on the existing taxpayers.
In a country of 17 crore people, the taxpayers are less than 40 lakhs. This is absolutely absurd. The use of technology should be increased to prevent tax evasion.
In an exclusive interview, the chairman of the Bangladesh Securities and Exchange Commission (BSEC), the stock market regulatory body, Professor Shibli Rubaiyat-ul-Islam said these issues. According to him, the development of the stock market requires keeping the bond market out of taxation and avoiding repeated taxation on the same income. Also, this professor of Dhaka University talked about establishing good governance in the stock market, floor price (lower limit) and increasing the confidence of investors. Monir Hossain, senior reporter of Jugantar, interviewed.
Question: As the guardian of the stock market, what do you think about the upcoming budget and investors?
Professor Shibli Rubaiyat: Stock market is the best place to collect long-term capital in industrialization. All sectors of the economy are related to it. Investment, employment, business-trade-all are involved here. In my opinion, frequent changes in the country’s budget with regular laws, taxes or any kind of privilege is against the interests of business and commerce.
Because, for new investments businessmen have to think long term. They evaluate and make decisions after planning a project. According to that plan, he thought of raising capital from debt or stock market. In that case, if they have to change their plans every year due to changes in government policy, then investment profits and shareholders’ interests are disturbed. As a result, sector-wise regulations should be long-term. Entrepreneurs can make informed decisions. They can also keep the product price within the prescribed limits.
On the other hand, there is a need to collect revenue for the socio-economic development of the country. At present the size of the country’s economy, the amount of revenue is very low. The ratio of revenue to Gross Domestic Product (GDP) is extremely low. It is very important to increase it. For this reason, the scope of tax should be increased.
In this case, companies or individuals who are not paying taxes, have to work with them. It is important to reach out to those who are not paying rather than trying to collect more by putting pressure on those who are paying taxes. Effective measures should be taken to increase the tax coverage. Setting up of digital booths and places where economic activities are being conducted in rural areas should be looked into.
A quarter of the country’s 170 million people pay taxes but don’t have to go elsewhere for money. When business is good, financial institutions are good. Tax collection is good. So we need to keep our businesses healthy and strong. This improves the stock market and increases the company’s ability to pay dividends to investors. As a result, people will invest in the stock market without keeping deposits in banks and other financial institutions. The market capitalization of the company will increase. And if there is a long-term and stable policy, more new companies will come into the market.
This will ‘automatically’ increase employment in the country. At the end of the day that is our main goal. The most important thing in the budget should be to take initiatives to increase employment. No one should be unemployed. However, increasing employment is not possible for the government alone. When the government increases employment, it puts pressure on revenue. Therefore, employment in the private sector should be increased.
Emphasis should be given to increase employment in agriculture, agro-based industries and manufacturing industries. This will create new tax payers. After getting a job, his income goes around in different ways (money cycle). VAT-tax started coming from those places. People’s purchasing power increases.
Question: What are you expecting specifically in the budget for the stock market?
Professor Shibli Rubaiyat: One of the sectors in the stock market is mutual funds. Currently, mutual funds are taxed at three places. Hopefully, it won’t be there in the coming days. The matter is being added to the Finance Bill. Our second place of hope is the bond market.
To popularize these bonds, it is desirable that they are tax-exempt like zero coupon bonds. Also, small investors in the capital market are repeatedly taxed on dividends. Basically the company pays dividends to the investors after tax from its earnings. Once that dividend goes to the investors, they have to pay tax again. That is, the same income has to be taxed two or three times. We are asking it to be reconsidered so that the tax is paid once. Otherwise, investors will not want to come to the stock market.
Question: As the head of the regulatory agency, what are the challenges for the country’s stock market at the moment?
Professor Shibli Rubaiyat: There is no challenge for the stock market. However, the rising US dollar poses a challenge for the stock market. Russia-Ukraine conflict
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