Bearish stock market takes toll on govt earnings
Monday, 2 January 2012
Babul Barman
The government's earnings from the Dhaka Stock Exchange (DSE) declined 36.04 per cent in 2011 compared to 2010, as bearish trend took a heavy tool on the stock market throughout the year.
The market analysts said due to bearish trend in the stock market last year daily average turnover declined substantially which contributed to the lower earnings, as tax is related to the turnover value.
The daily average turnover value in 2011 came down to Tk 6.64 billion which was Tk 16.83 billion in 2010, down by almost 60 per cent.
The government earned Tk 2.01 billion as tax on brokerage commission from January to December, 2011, compared to Tk 3.15 billion in 2010, down by 36.04 per cent as per DSE's latest data.
In 2010, the government earned Tk 3.15 billion as taxes at source against only Tk 620 million in 2009.
The market capitalisation to gross domestic product (GDP) ratio also stood at 33.23 per cent on December 29, 2011, which is 17.44 per cent lower than that of the previous year's 50.67 per cent.
The total turnover value declined by 68.60 per cent or Tk 12.23 billion to Tk 5.59 billion in the year.
The market capitalisation also plunged to Tk 2,616.73 billion, which is 25.40 per cent or Tk 891.27 billion lower than that of the previous year.
The market PE (Price-Earnings) ratio hit a five-year low to 13.68 in December, 2011 following a free fall in the share prices throughout the year compared to the market PE ration of 29.50 in December last year.
In the last fiscal year's budget, Finance Minister AMA Muhith doubled tax deductible at source against brokerage commission of the stockbrokers to 0.10 per cent from 0.05 per cent. On October 27, 2011, the government re-fixed the tax deductible at source to 0.05 per cent again following repeated appeals from the stock exchanges.
In last four years, the revenue earnings of the government from the stock market increased at a stress while it plunged in 2011 due to lower turnover value following slide in shares prices, commented a stock broker.
Mr AB Mirza Azizul Islam, former finance adviser to the caretaker government, said, "Tax is related to turnover; so tax declined, as the turnover marked a fall following lower participation of the investors."
The government's earnings from the Dhaka Stock Exchange (DSE) declined 36.04 per cent in 2011 compared to 2010, as bearish trend took a heavy tool on the stock market throughout the year.
The market analysts said due to bearish trend in the stock market last year daily average turnover declined substantially which contributed to the lower earnings, as tax is related to the turnover value.
The daily average turnover value in 2011 came down to Tk 6.64 billion which was Tk 16.83 billion in 2010, down by almost 60 per cent.
The government earned Tk 2.01 billion as tax on brokerage commission from January to December, 2011, compared to Tk 3.15 billion in 2010, down by 36.04 per cent as per DSE's latest data.
In 2010, the government earned Tk 3.15 billion as taxes at source against only Tk 620 million in 2009.
The market capitalisation to gross domestic product (GDP) ratio also stood at 33.23 per cent on December 29, 2011, which is 17.44 per cent lower than that of the previous year's 50.67 per cent.
The total turnover value declined by 68.60 per cent or Tk 12.23 billion to Tk 5.59 billion in the year.
The market capitalisation also plunged to Tk 2,616.73 billion, which is 25.40 per cent or Tk 891.27 billion lower than that of the previous year.
The market PE (Price-Earnings) ratio hit a five-year low to 13.68 in December, 2011 following a free fall in the share prices throughout the year compared to the market PE ration of 29.50 in December last year.
In the last fiscal year's budget, Finance Minister AMA Muhith doubled tax deductible at source against brokerage commission of the stockbrokers to 0.10 per cent from 0.05 per cent. On October 27, 2011, the government re-fixed the tax deductible at source to 0.05 per cent again following repeated appeals from the stock exchanges.
In last four years, the revenue earnings of the government from the stock market increased at a stress while it plunged in 2011 due to lower turnover value following slide in shares prices, commented a stock broker.
Mr AB Mirza Azizul Islam, former finance adviser to the caretaker government, said, "Tax is related to turnover; so tax declined, as the turnover marked a fall following lower participation of the investors."