Stocks
Budget 2024-25: Corporate Tax Slashed to 25% for Non-Listed Firms
In the proposed budget for the fiscal year 2024-25, Finance Minister Abul Hasan Mahmood Ali announced a reduction in the corporate tax rate for non-listed companies by 2.5%. This move aims to stimulate growth and compliance among privately-held firms by lowering their tax burden to 25%.
The announcement was made on Thursday, June 6, during the budget presentation in the National Parliament, chaired by Speaker Shirin Sharmin Chaudhury and attended by Prime Minister Sheikh Hasina. Prior to the presentation, the proposed budget received cabinet approval and was signed by President Md. Sahabuddin.
Key Provisions on Corporate Tax
Reduction in Corporate Tax Rate: For companies not listed on the stock exchange, the corporate tax rate will be reduced from 27.5% to 25%. However, this reduction is conditional on specific financial practices.
Conditions for Reduced Rate: To qualify for the reduced tax rate, companies must ensure that any single transaction exceeding Tk 5 lakh and all annual expenses or investments exceeding Tk 36 lakh are conducted through banking channels. This measure is intended to promote transparency and discourage unreported cash transactions.
Tax Rates for IPOs: Companies that list on the stock market and offer more than 10% of their shares through Initial Public Offerings (IPOs) currently enjoy a corporate tax rate of 20%. If they offer less than 10% of their shares, the rate is 22.5%. The proposed budget increases these rates by 2.5% each, to 22.5% and 25%, respectively. However, companies that meet banking transaction requirements will also receive a 2.5% tax reduction.
Penalty for Non-Compliance: Companies failing to comply with the banking transaction requirement will continue to face a higher tax rate. Non-listed companies that do not meet the transaction criteria will
Budget 2024-25: 2.5% Reduction in Corporate Tax for Non-Listed Companies
In the new budget for the fiscal year 2024-25, Finance Minister Abul Hasan Mahmood Ali has proposed a 2.5% reduction in the corporate tax rate for non-listed companies. This change lowers the rate from 27.5% to 25% for privately-held firms, aiming to alleviate tax burdens and encourage better financial practices.
The announcement was made during the budget presentation on Thursday, June 6, in the National Parliament, chaired by Speaker Shirin Sharmin Chaudhury, with Prime Minister Sheikh Hasina in attendance. The proposed budget had earlier received cabinet approval and was signed by President Md. Sahabuddin.
Detailed Breakdown of Corporate Tax Adjustments
Lowered Corporate Tax Rate: The corporate tax for non-listed companies will be reduced to 25%, down from the current 27.5%. This reduction aims to make private businesses more competitive and compliant.
Conditions for Reduced Tax: To benefit from the reduced tax rate, companies must ensure that any single transaction over Tk 5 lakh and all annual expenditures or investments exceeding Tk 36 lakh are processed through banking channels. This condition is set to increase financial transparency and accountability.
Tax Rates for IPOs: For companies listed through Initial Public Offerings (IPOs), the corporate tax rate will be adjusted based on their share offerings. Companies offering more than 10% of their shares will face a tax increase from 20% to 22.5%. Those offering less than 10% will see an increase from 22.5% to 25%. These companies can also receive a 2.5% tax reduction if they comply with the banking transaction requirement.
Penalties for Non-Compliance: Companies failing to adhere to the banking transaction stipulations will not benefit from the reduced tax rates. Non-listed companies that do not meet these requirements will continue to be taxed at the higher rate of 27.5%.
This proposed adjustment in corporate tax aims to streamline tax obligations, encourage the use of formal banking channels for large transactions, and ensure greater financial transparency within the corporate sector.
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
The Bangladesh Securities and Exchange Commission (BSEC) has removed three audit firms from its panel for their failure to secure enlistment with the Financial Reporting Council (FRC), according to a notice issued today.
The firms—A Hoque & Company, FAMES & R, and SK Barua & Company Chartered Accountants—were delisted following the FRC’s request. In December last year, the FRC published a list of enlisted audit firms and subsequently, in February, requested the BSEC to remove any firms that were not included on that list.
BSEC regulations mandate that financial statements signed by auditors outside its approved panel will not be accepted. With the removal of these three firms, the total number of audit firms on the BSEC panel has been reduced from 48 to 45.
Sources from the FRC revealed that 15-20 audit firms failed to secure enlistment last year, and approximately 45 chartered accountants are currently under restrictions imposed by the Institute of Chartered Accountants.
Although the delisted firms can no longer audit issuer companies or listed securities, they are allowed to complete audit and assurance services that were initiated before their removal, the BSEC clarified.
