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| Sunday, 27 June 2004 |
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Fifteen per cent tax to be levied on all share market profits Profit tax on share market transactions on the Colombo Stock Exchange (CSE) is in operation although that is under study for revision, Secretary to the Treasury Dr P.B Jayasundera said. He said that under this system the government will levy a 15 percent tax on all profits made in share market transactions. This new system was introduced from the last budget, which came into effect from April 1 this year, he said. "The budget proposals made last year would be implemented as it is, which will not be subjected to any changes until the next budget," Dr Jayasundera said . In the meantime the Colombo Stock Brokers Assoicaton (CSBA) has made a request to the government to remove the tax in a bid to encourage share trading activities at the CSE . "We had made a representation to the government to do away with this tax system," it's newly inducted Chairman Asanga Seneviratne said. Minister of Finance Dr Sarath Amunugama has shown a positive interest to take this matter into consideration in the future, he said. He said that this tax was proposed during the last budget to impose a 15 per cent levy on profit made by clients from all transactions, which would be detrimental to stock market activities. "This would also result in a disastrous situation for small traders in the market as they are playing a leading role at the CSE ,"said Seneviratne. The proposed system would effect the whole stock market therefore CSBA advocates a standard fee instead of the tax from clients ,to make the system more simple and easy. The new system would create a major problem, when it comes to collecting of money from shareholders, which is not practically possible, he said. Senevirartne said that the association is also backing the demutualisation of the stock exchange to remove red tapes and slow process of business, to make it more beneficial not only to stockbrokers but also to shareholders. "With the demutualisation of the process CSE, it would become a limited liability company," he said. Proposals for the demutualisation of the CSE was to allow stockbrokers to be play an active role to create a vibrant business community in the country , he said. (H.H.S.) |
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