Bangladesh to Waive off Tax Deducted at Source on Sukuk

Bangladesh’s National Board of Revenue (NBR)’s income-tax division has decided to waive Tax Deducted at Source (TDS) on Sukuk transactions between Originator and Special Purpose Vehicle (SPV).

Why it Matters?

Islamic banks account for around 35% of the Bangladesh’s banking sector's market. Sukuk, however, has not much traction, as both banks and individual investors are taking a cautious approach to investing in the real asset-backed bond. Officials claim that the latest tax exemption is part of a package designed to make Sukuk more appealing to investors by excluding it from various types of taxation at source. This included eliminating the 4% capital gains tax from transfer of asset to the SPV of Sukuk, as well as value-added tax o...