They also said leasing institutions should get incentives what banks are now enjoying in the event of bad loan provisioning.

Leasing companies said now banks, insurance and financial institutions, whether listed or not, have to pay 45 percent corporate tax.

However, the rate for other companies, which are listed with the bourses, is 30 percent while it is 37.5 percent for other non-listed companies.

In a budget proposal for the 2004-05 fiscal, the Bangladesh Leasing and Financial Companies Association (BLFCA) termed the existing tax regime discriminatory and urged the government to re-fix the corporate tax rate at 30 percent for listed insurance and financial institutions.

Corporate tax for non-listed insurance and financial institutions should be fixed at 37.5 percent, what is now applicable for other non-listed companies, the BLFCA suggested.

While talking to The Daily Star, A Quadir Choudhurv, president of the BLFCA, said under the present loan provisioning system commercial banks are permitted to deduct 2 percent from their provisioning while paying taxes. "Leasing institutions should be allowed to deduct 3 percent," he added.

In a bid to encourage companies to declare more dividends, the BLFCA demanded withdrawal of existing 10 percent dividend distribution tax.

In 2003, leasing and financial institutions disbursed Tk 1300 crore in different sectors with 95 percent recovery rate.

The BLFCA also urged the government to adopt the international accounting standard (IAS), an international rules, which the leasing companies adopted on January 1.