The government's revenue earnings from the Dhaka Stock Exchange (DSE) shot up 46 per cent in August compared to a month ago as trading volume was on the rise.
Analysts said the government's earnings from the DSE rose in August as trading volume and sponsor/directors shares sales increased significantly, which helped higher tax collection.
According to statistics from the DSE, the government bagged tax worth Tk 148 million in August against Tk 101 million in July 2015, registering an increase of 46 per cent over the month.
The government earned the amount on brokerage commission and share sales by sponsor-directors and placement holders.
Of the total revenue earnings in August, Tk 129 million came from the TREC (trading right entitlement certificate) holders' commission and Tk 19 million came from the share sales by sponsor-directors and placement holders, the DSE data showed.
The DSE, on behalf of the government, collects tax as TREC holders' commission and sponsor and placement shares sales at the rate of 0.05 per cent and 5.0 per cent respectively and deposits the amount to the government exchequer.
The government's earnings from tax on sales of sponsor and placement shares rose to Tk 19 million in August which was only Tk 3.04 million in July. On the other hand, TREC holders' commission stood at 129 million in August against Tk 98.27 million in July, DSE data showed.
The daily average turnover on the DSE was Tk 6.08 billion in August which was Tk 5.78 billion in the month of July, 2015, according to DSE data.
However, the benchmark index of the DSE dropped slightly in August and closed the month at 4,768.66, shedding 23.68 points over the month of July.
"The investors were active both sides of fence almost throughout the month of August which helped higher turnover, resulting higher tax collection," said an analyst at a leading stockbroker.
However, he said, though the government's earnings from DSE rose in August, it is still low.
"The earnings are related to turnover. It's usual that tax will rise if turnover increases," said Akter H Sannamat, a capital market expert adding that turnover marked a rise in August compared to a month ago, so did tax.
AB Mirza Azizul Islam, former finance adviser to the caretaker government, emphasized to bring good quality issues in stock market to enhance government's revenue earnings from stock market.
The government earned tax worth around Tk 1.75 billion in the outgoing fiscal year (FY) from the DSE, Tk 1.54 billion in the FY 2013-14, Tk 1.27 billion in the FY 2012-13 and highest revenue earring was around Tk 4.48 billion in the FY 2010-11 when the market was bullish.
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