The government's revenue earnings from the Dhaka Stock Exchange (DSE) fell 26 per cent in the first four months of the current fiscal year compared to the same period of the previous fiscal as trading volume was on the decline.
The government bagged tax worth Tk 553.50 million in July-October period of the fiscal year 2015-2016, which was Tk 749.47 million in the corresponding period of the previous fiscal, according to statistics from the 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 earnings of Tk 553.50 million in the first four months of the current fiscal, Tk 384.68 million came from the TREC holders' commission and Tk 168.81 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 earned Tk 749.47 million in July-September period of the fiscal year 2014-15. Of them, Tk 471.20 million came from TREC holders' commission and Tk 278.27 million came from share sales by sponsor-directors and placement holders, the DSE data showed.
However, the month-on-month government's earnings from DSE shot up by 34 per cent in October compared to a month ago as sponsor/directors shares sales increased significantly, which helped higher tax collection.
In October, the government received tax worth Tk 174.34 million which was Tk 129.90 million in September, 2015.
The government's earnings on share sales of sponsor and placement holders rose to Tk 101 million in October which was Tk 46.19 million in September, 2015. On the other hand, TREC holders' commission came down to Tk 73.35 million in October against Tk 83.70 million in September, DSE data showed.
DSE officials said the overall tax collection declined in first four months in current fiscal year from the DSE due to lower transactions following the sluggish trend in stock prices.
"A bearish trend in the capital market affected the government's earnings from DSE, as the trading volume was on the decline," he said.
The daily average turnover on the DSE dropped to nearly Tk 3.67 billion in October which was Tk 4.40 billion in the month of September, 2015, the DSE data showed.
DSEX, the benchmark index of the DSE, also lost 288 points or 5.92 per cent to settle at 4,544.48 in the month of October over the previous month.
"The earnings are related to turnover. It's usual that tax will fall if turnover declines," said an analyst at a leading stockbroker.
The turnover marked a decline in the first four months of the current fiscal, compared to same period last fiscal, so did tax," he said. "The tax flow will rise if the market will be back on track," he added.
DSE data showed that in the last three fiscal years, the revenue earnings of the government from the stock market declined due slide in shares prices.
DSE paid tax worth Tk 2.72 billion in the fiscal year 2011-12, Tk 1.27 billion in the fiscal year 2012-13, Tk 1.54 billion in the fiscal year 2013-14 and Tk 1.74 billion in the fiscal year 2014-15 on TREC holders' commission and share sales by sponsor-directors and placement holders.
However, DSE paid the highest tax worth Tk 4.47 billion in the fiscal year 2010-11, when the market was bullish.
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Govt earnings from DSE down 26pc
Babul Barman | Published: November 04, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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