The government revenue earnings from the Dhaka bourse surged by 65 per cent in July-December 2021 compared to the same period a year earlier backed by rising trading volume.
Market analysts said backed by rising turnover and bullish capital market, the government earnings from the Dhaka Stock Exchange (DSE) rose accordingly, as earning is related to turnover.
The market turnover rose significantly in the outgoing year as the buoyant investors gave boost to the capital market amid growing confidence, said a merchant banker.
The country's capital market had a good year in 2021 as the core index of the DSE posted an impressive 25 per cent growth. The daily turnover also jumped to Tk 14.75 billion on an average in 2021, which was Tk 6.49 billion in 2020.
Accordingly, the government bagged revenue worth Tk 2,389 million in July-December 2021, as against Tk 1,451 million in the same period of the previous year, showing a 65 per cent growth, according to statistics with the DSE.
Of the total earnings in July-December 2021, Tk 2022 million came from the TREC holders' commission, popularly known as brokerage commission, while Tk 367 million came from the share sales by sponsor-directors and placement holders during the period under review, the DSE data shows.
In July-December 2020, Tk 1,029 million came from the TREC holders' commission while Tk 422 million came from the share sales by sponsor-directors and placement holders.
The government earned the amount on TREC (trading right entitlement certificate) holders' commission and share sales by sponsor-directors and placement holders.
The DSE, on behalf of the government, collects tax as TREC holders' commission and share sales by sponsor-directors and placement holders at the rate of 0.05 per cent and 5.0 per cent respectively and deposits the amount to the government exchequer.
The government earnings from the prime bourse rose as trading activities increased substantially during the period for July-December 2021, said a DSE official.
"The earnings are related to turnover. It's usual that tax will rise if turnover increases," he said.
He noted that as the turnover marked an increase in July-December period in the outgoing calendar year compared to that of the previous year, so did the tax.
The government's revenue earnings from the DSE registered a 10 years high to Tk 2.66 billion in the FY 2020-21 as the DSE turnover recorded a decade high in few sessions in the last fiscal year.
However, in the FY2019-20, the government's earnings from the DSE plunged more than 10 years low to Tk 1.04 billion due to sluggish market turnover coupled with trading suspension for more than two months due to Covid-19 outbreak.
The DSE paid tax worth Tk 2.72 billion in FY2011-12, Tk 1.27 billion in FY2012-13, Tk 1.54 billion in FY2013-14, Tk 1.74 billion in FY2014-15, Tk 1.58 billion in FY2015-16, Tk 2.46 billion in FY2016-17, Tk 2.33 billion in FY2017-18 and Tk 2.51 billion in FY2018-2019 on TREC holders' commission and share sales by sponsor-directors and placement holders.
However, the DSE paid tax worth Tk 4.47 billion in the FY2010-11, the highest in its history, when the market witnessed a wild trend before crashing.