The withdrawal of tax exemption on issuers of mutual funds will leave the nascent industry in tatters, operators said Tuesday.
The budget for the fiscal 2011-12 imposed tax on sponsors/issuers of mutual funds, which operators termed a blow.
"We were always exempted from tax, but the latest budget suddenly imposed tax on our industry," Yawer Sayeed, managing director & CEO of AIMS of Bangladesh told the FE.
He said the mutual fund industry sponsors are exempted from tax all over the world.
Industry insiders said the already listed 36 mutual funds and more 36 (which are in the pipeline) will face tremendous pressure to sustain due to the sudden imposition of tax.
"The retrospective effect of the new taxation is an added misery for us who have already declared dividends for the shareholders," Mr Sayeed, the pioneer of mutual fund industry in Bangladesh said.
Mutual Funds play a very important role in the development of the capital market. The maturity of the market is also at times gauged on the share of collective investment schemes in the market capitalization.
Globally mutual funds are investment of choice for retail as well as institutions due to its inherent benefit of diversification and active professional management.
Mutual funds have a history of providing market stability and facilitating institutionalization of capital markets.
Terming the latest step 'an absolute cheating' with the investors, Mr Sayeed demanded its immediate withdrawl.
Echoing the same view, Moin Al Kashem, managing director & CEO of Prime Finance Asset Management Company Ltd said the new measure will only discourage the investors to buy mutual funds.
"It is simply a suicidal step for the mutual fund industry of the country's growing stock market and the government should re-consider this just to save the nascent industry," Mr Moin said.
Hasan Imam of Race Asset Management said the Association of Asset Management Companies & Mutual Funds has already expressed its concern on the issue to both National Board of Revenue (NBR) and Securities and Exchange Commission (SEC).
He said the mutual fund sponsors deserve relaxation in taxation as they have to distribute minimum 70 per cent profit to the investors.
"Moreover we run the business under a trustee, not under a company, so we deserve the advantage," he added.
The country has now 36 mutual funds with an issued capital of Tk 25,719 million.
http://www.thefinancialexpress-bd.com/more.php?news_id=145696&date=2011-08-10
The budget for the fiscal 2011-12 imposed tax on sponsors/issuers of mutual funds, which operators termed a blow.
"We were always exempted from tax, but the latest budget suddenly imposed tax on our industry," Yawer Sayeed, managing director & CEO of AIMS of Bangladesh told the FE.
He said the mutual fund industry sponsors are exempted from tax all over the world.
Industry insiders said the already listed 36 mutual funds and more 36 (which are in the pipeline) will face tremendous pressure to sustain due to the sudden imposition of tax.
"The retrospective effect of the new taxation is an added misery for us who have already declared dividends for the shareholders," Mr Sayeed, the pioneer of mutual fund industry in Bangladesh said.
Mutual Funds play a very important role in the development of the capital market. The maturity of the market is also at times gauged on the share of collective investment schemes in the market capitalization.
Globally mutual funds are investment of choice for retail as well as institutions due to its inherent benefit of diversification and active professional management.
Mutual funds have a history of providing market stability and facilitating institutionalization of capital markets.
Terming the latest step 'an absolute cheating' with the investors, Mr Sayeed demanded its immediate withdrawl.
Echoing the same view, Moin Al Kashem, managing director & CEO of Prime Finance Asset Management Company Ltd said the new measure will only discourage the investors to buy mutual funds.
"It is simply a suicidal step for the mutual fund industry of the country's growing stock market and the government should re-consider this just to save the nascent industry," Mr Moin said.
Hasan Imam of Race Asset Management said the Association of Asset Management Companies & Mutual Funds has already expressed its concern on the issue to both National Board of Revenue (NBR) and Securities and Exchange Commission (SEC).
He said the mutual fund sponsors deserve relaxation in taxation as they have to distribute minimum 70 per cent profit to the investors.
"Moreover we run the business under a trustee, not under a company, so we deserve the advantage," he added.
The country has now 36 mutual funds with an issued capital of Tk 25,719 million.
http://www.thefinancialexpress-bd.com/more.php?news_id=145696&date=2011-08-10
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