Govt revenue from stock trading hits 13-month high

The government received Tk 126.58 million in tax from stock trading in August this year from Dhaka Stock Exchange (DSE), the highest in last 13 months since July 2013.
In July 2013, the government bagged Tk 153.02 million in tax from stock trading from DSE.
Transaction in the market was on the rise last month with a recovering tone from the prolonged downtrend in share prices in recent months.
The daily average turnover in August jumped to Tk 6.33 billion, which was only Tk 2.88 billion in the previous months - July, according to data from the DSE.
The prime index of the DSE also crossed 4,500-point mark in August, gaining 134 points or 3.03 per cent over the previous month- July.
Market analysts said market witnessed strong buying pressure mostly from institutions as continuous positive market trend boosted up investors' confidence.
The month-on-month government' earnings from DSE also shot up by 208 per cent in August compared to July, this year. In July, the government earned tax only Tk 41.15 million.
Tax collection is related to trading volume and value. More trading of stocks generates more tax for the government, DSE officials said.
The DSE, on behalf of the government, collects the tax as brokerage commission at 0.05 per cent and deposits the amount to the state coffer.
An official of the premier bourse said it is natural that tax collection will increase if turnover rises on the trading floor, as the tax is collected from turnover value.
"Tax collection from brokerage commission marked a significant rise in August, as turnover also went up compared to the previous months," the DSE official said.
"The revenue earnings are related to turnover. It's usual that tax will rise if turnover increases," said Akter H Sannamat, managing director of Union Capital.
The government also earned higher tax from sales of sponsor and placement shares in August than the last month.
It bagged Tk 74.82 million in tax from share sales by sponsor shareholders last month which was Tk 24.05 million a month ago.
The DSE, on behalf of the government, collects the tax as placement shares sales at the rate of 5.0 per cent and deposits the amount to the government exchequer.
DSE data showed that in the last three fiscal years, the revenue earnings from the bourse declined at a stress due to lower turnover value following slide in shares prices.
In fiscal year 2010-11, the bourse paid the highest tax worth Tk 4.47 billion, in FY 2011-12 DSE paid worth Tk 2.72 billion and FY 2012-13 the bourse paid tax worth Tk 1.27 billion on brokerage commission and share sales by sponsor-directors and placement holders.
However, tax collection from the bourse  rose in the last fiscal year against the previous fiscal amid rising trading volume. The government bagged tax worth around Tk 1.54 billion in the FY 2013-2014 against Tk 1.27 billion in the FY 2012-2013.