The Bangladesh Power Development Board (BPDB) has sought waiver from paying advance income tax (AIT) as it has moved to offload 10 per cent more shares of Dhaka Electric Supply Company (DESCO) in the stock market, officials said.
According to Section 53M of Income Tax Ordinance, 5.0 per cent AIT has to be paid in case of offloading shares of taxable entities.
The National Board of Revenue (NBR) had earlier identified the BPDB as a taxable entity and informed that AIT is applicable to offloading its shares.
BPDB secretary Zahurul Huq in a recent letter to Power Division secretary Monowar Islam sought ministry's intervention again to get tax waiver. In 2011, the government had asked the BPDB to offload 10 per cent shares of DESCO.
He wrote that the BPDB is a loss-making entity. Thus it can be given waiver from paying AIT in case of offloading shares.
Mr Huq also wrote that the government has taken initiative to make investment in power sector by mobilising money from the stock market. Investment in power sector will further increase if tax waiver is given in case of 10 per cent share offload of DESCO. It will help attain the government's target in power generation.
He requested the secretary to take steps so that the NBR agrees to give tax waiver.
Statistics show that the government owns 75 per cent shares, institutes 17.01 per cent, foreign investors 0.54 per cent, and public 7.45 per cent shares of DESCO. The authorised capital of the company is Tk 5.0 billion and paid-up capital is Tk 3.786 billion.
The company provided 10 per cent cash dividend and 5.0 per cent bonus share to its shareholders in 2015. Before paying tax, the company's net profit was Tk 1.99 billion in the fiscal year 2014-15.
 A senior official at the Ministry of Finance (MoF) told the FE that the move to divest more shares of state-owned enterprises has remained stalled since the share market collapse in 2010-11.
He said the process is found to be almost stopped thus the ministry recently asked 26 state-owned enterprises (SoEs) to provide it with updates on the progress in offloading shares.   
The official said further decision regarding offloading of shares will be taken once the MoF receives updates from the SoEs.  
In 2005, the government selected 26 SoEs for offloading a certain portion of the shares in the capital market. Later, some shares of the SoEs like Titas, DESCO, DESA, Jamuna Oil, Eastern Lubricants, Bangladesh Shipping Corporation, and Rupali Bank were divested.
The SoEs which are to divest shares in the stock market include Bangladesh Telecommunications Company Ltd (BTCL), Bangladesh Shipping Corporation, Bangabandhu Bridge, Bakhrabad Gas Systems Ltd, Sylhet Gas Fields Ltd, Gas Transmission Co Ltd, Bangladesh Services Ltd (holding company of Dhaka Sheraton Hotel) and Essential Drugs Co Ltd.
Another state-owned enterprise Liquefied Petroleum Gas Corporation Limited (LPGL) recently decided to offload 25 per cent shares in the stock market by December next.
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Source: The Financial Express