The Impact of Companies’ Listing into Capital Market on National Tax Revenues: The Case of Bangladesh

Abstract

Capital market of Bangladesh is in a race of development; the growth of which has been significantly increasing since the last decade. The motivation of tax policy for bringing more participation of fund raisers into the capital market is relatively important to consider. Thus, the study on “The impact of companies' listing into capital market on national tax revenues: The case of Bangladesh” was founded on finding whether the curtailed tax liability percentage applicable to the listed companies relative to the unlisted companies is sufficient to face the tax revenue outputs from the listed companies relative to the unlisted companies. The study considered only the corporate tax of pre-IPO financial statements and post-IPO financial statements. The study has tried to discover the tax differences between the datasets in different paradigms. With data from feasible time frame, and application of feasible methodology, it has been found that, even if tax percentage is lower to listed companies than to unlisted companies, the average tax disbursed by the listed companies to government is much higher than the unlisted companies which indicates a very positive guideline to policymakers for motivating companies with curtailing tax percentage to another level and increasing number of listed companies and total tax revenues simultaneously.