How does the government tax bonus shares issued to shareholders by companies that prefer not to give cash to investors?....#its a genuine question,dont laugh because I honestly dont know#

I might be wrong but from my basic understanding, its already taxed.... bonus share(s) comes from money that was kept in reserves after taxation of previous profits.

Bonus shares are not taxed at all despite dividends being taxed twice.. Bonus issues are a means of avoiding tax not evading tax.. Avoiding tax is legal while evading tax is not..

Really? both dividends and bonus are distributed from after tax reserves so both are taxed at the corporate level.

Recipient of dividends pays tax since it's an income, at final withholding tax rate for individuals and as advance for corporate.

Dividends to a local company owning significant shareholding (12.5% or more) are exempt from tax.

Shareholder is not taxed if he/she decides to liquidate the dividends since capital gains tax on shares is suspended.

Instances where you might be forced to pay tax on bonus shares, eventually:

1. Company is wound up and distributions to shareholders are taken as dividends.
2. Company has excess cash but decides to issue bonus instead of distributing the cash.