The government's revenue earnings from the prime bourse fell 20 per cent in the first-quarter (Q1) of the current fiscal year (FY) compared to the same period of the previous FY as trading volume was on the decline.
Market insiders said on the back of falling trade volumes, the government earnings from the premier bourse fell accordingly as earnings is related to trading volume.
The government bagged tax worth about Tk 303 million in the first three months for July-September period of the FY 2016-2017, which was Tk 379 million in the corresponding period of the previous fiscal, according to statistics from the Dhaka Stock Exchange (DSE).
The government earned the amount on TREC (trading right entitlement certificate) holders' commission and share sales by sponsor-directors and placement holders.
Of the total revenue earnings of Tk 303 million in the first three months of the FY 2016-17 for July-September, Tk 247 million came from the TREC holders' commission and Tk 56 million came from the share sales by sponsor-directors and placement holders, the DSE data showed.
The DSE, on behalf of the government, collects the 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.
On the other hand, the government collected Tk 379 million in the first three months of the FY 2015-16. Of them, Tk 311 million came from TREC holders' commission and Tk 68 million came from share sales by sponsor-directors and placement holders, according to DSE data.
However, month-on-month government's earnings from DSE almost same in September as total revenue earning stood at Tk 109 million in September which was also about Tk 109 million in August, 2016, the DSE data showed.
The total turnover on the DSE stood at about Tk 87 billion in September, 2016 as the month observed only 17 trading sessions due to nine days Eid-ul-Azha vacation, including weekly holidays.
On the other hand, the total turnover on August, 2016 was Tk 101 billion which observed 21 trading sessions.
Meanwhile, DSEX, the benchmark index of the DSE, rose significantly in September by 146 points or 3.21 per cent to settle at 4,695.18 in the last session of September.
A DSE official said the tax collection declined in first quarter (Q1) in current fiscal year due to lower transactions.
"The earnings are related to turnover. It's usual that tax will fall if turnover declines," said an analyst at a leading brokerage firm.
"The turnover marked a decline in the first three months of the FY 2016-17, compared to same period of the previous fiscal, so did tax," he said adding that the revenue flow will rise when the market will be back on track.
DSE data showed that in the last five fiscal years, the revenue earnings of the government from the stock market declined due to lower turnover value following slide in shares prices.
DSE paid tax worth Tk 2.72 billion in the FY 2011-12, Tk 1.27 billion in the FY 2012-13, Tk 1.54 billion in the FY 2013-14, Tk 1.74 billion in the FY 2014-15 and Tk 1.58 billion in the FY 2015-16 on TREC holders' commission and share sales by sponsor-directors and placement holders.
However, DSE paid tax worth Tk 4.47 billion in the fiscal year 2010-11, highest in its history, when the market saw a bullish trend.
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Govt earnings from DSE down 20pc in Q1
Babul Barman | Published: October 04, 2016 00:00:00 | Updated: October 03, 2016 22:05:54
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