Finance bill passed in Parliament allowing black money in capital market

AKM Moinuddin, UNB Staff Writer
Sangsad Bhaban, June 28 (UNB) – Parliament Tuesday night passed the Finance Bill 2011 allowing investment of black money in the share market.
It also reduced the rate of tax at source from all exports to 0.7 percent while 0.6 percent for the RMG sector. In the proposed budget the Finance Minister proposed to increase the rate to 1.50 percent for all.
The tax rates for registration of flat, building or space of real estate developers on the basis of commercial purposes also reduced.
Prime Minister Sheikh Hasina while taking part in the general discussion on the budget fiscal requested the Finance Minister to allow the black money in the share market. She also requested the Finance Minister to allow the disclosed money holders to invest in the share market with 10 percent rebate.
She also proposed to reduce the rate of tax at source on export items, and rate for the registration of flat, building or space for commercial purposes.
The Prime Minister urged the Finance Minister to include the poultry sector in the tax holiday scheme upto June 2013 and impose zero tariffs for the import of gas cylinder and its related materials. “We want to provide LPG gas at lower rate to the houses, please slash all duties and make it more affordable to the housewives,” she said adding that poultry sector creates huge employment for the youths.
On the share market issue, the Prime Minister said that the share prices were overvalued during the end part of the last. “That’s why there was a slide down in the market.”
She alleged that most of the brokerage houses are owned by BNP men. “They also played some games from behind.”
She said that the government has taken steps to float shares of the state-owned enterprises in the share market and hoped that some SOEs and non-government shares will be off-loaded in the market within a couple of months.
Regarding the inquiry committee of the share market, she said that the inquiry committee made observations on surface level.
She asked the minister concerned to make some deep investigation in the matter and punish the real culprits behind this matter.
“In 2009-10 fiscal we allowed black money in the share market, but it was not continued during the current fiscal. As we are allowing black and white money for BIFFL and treasury bonds I will request the Finance Minister to allow the black money in the share market.”
She also proposed to reduce the tax rates for registration of flat, building or space of real estate developers on the basis of commercial purposes.
In the Proposed budget the rate for Gulshan, Banani, Baridhara, Motjheel and Dilkusha of Dhaka was fixed at Tk 20,000, for Dhanmandi, Lalmatia, Uttara, Basundhara, DOHS, Mahakhali, Dhaka Cantonment, Karwanbazar of Dhaka and Khulshi, Agrabad, Nasirabad and Panchlaish of Chittagong was Tk 15,000 and Tk 5,000 for other areas.
But the Prime Minister asked the Finance Minister to reduce the rate to Tk 8,000, Tk 6,000 and Tk 5,000 respectively.
Finance Minister AMA Muhith, who moved the bill accepted all the proposals of the Prime Minister.
In his winding up speech, the Finance Minister said that inflation would be a big challenge due to the price hike of two major commodities – food and fuel. He said that the government has taken steps so that food items are within the purchasing power of the common men.
He said that the corporate tax for the listed cigarette manufacturing companies would be 35 percent.
Muhith said duty on luxurious double cabin pick-up, the supplementary duty on 1001 cc to 1500 cc are reduced to 30 percent from the proposed 45 percent.
On share market, Muhith said he thought stability restored in the capital market. The key index is hovering 5500 to 6000. “The capital market will have to be allowed to move on its own way.”
He said the government would soon start de-utilization of the stock market which will help reduce illegal practices in share trading.
Muhith said the huge amount that might be 42 percent to 82 percent remained unutilized and the money will have to bring back in the mainstream.
The Finance Minister ruled out crisis in budget financing. “It has well been described in the budget proposal from which channel money will come.”
He also differed with the claim of declining investment, remittance inflow, export and import. “It’s totally untrue. In some cases rate of growth has only decelerated.”
Muhith said inflation is big challenge and informed that steps are being taken to keep the prices of five essentials at commoners’ reach.
He said the government is giving importance on land management and digital Bangladesh .
Describing electricity and gas crisis he said the government would finalize coal policy by December.
Mentioning that revenue earning has witnessed a 27 percent growth in the current fiscal, Muhith strongly hoped that the revenue earning would reach the target or even exceed in the next fiscal.
Later, the Bill was passed by voice vote after having a general discussion of 49 hours and thirteen minutes in 16 days on national budget for 2011-12.
END/UNB/AKM/