The government's revenue earnings from the Dhaka Stock Exchange (DSE) rose 10 per cent in the first seven months of the current fiscal year (FY), compared to the same period of last FY as the trading volume increased.
The government received tax worth Tk 932.22 million in the first seven months (July'13 to January'14) of the current FY which was Tk 847.83 million in the same period last FY according to statistics from the DSE.
The government earned the amount on brokerage commission and share sales by sponsor-directors and placement holders.
The DSE, on behalf of the government, collects the tax as brokerage commission and sponsor and placement shares at the rate of 0.05 per cent and 5.0 per cent respectively and deposits the amount to the government exchequer.
The month-on-month government earrings from DSE also increased 9.90 per cent in January, 2014 compared to December, 2013. In January, the government earned tax worth Tk 139.20 million against Tk 126.66 million in December.
DSE officials said the tax collection increased in first seven months in the current fiscal year due to higher transactions following the rising trend in stock prices in recent months.
"The tax collection from DSE remained rise as the market backed on right track almost throughout in January," he said.
The foreign investors were also on buying mood almost throughout the month of January as they found the time just right to take positions at lower prices which also contributed to higher turnover, he added.
Foreign investors bought shares worth Tk 4.03 billion, while they sold stocks worth Tk 1.24 billion in January 2014, to take their net investment for the month to Tk 2.78 billion. It was also the eight months highest net investments in DSE since June last year.
"The earnings are related to turnover. It's usual that tax will rise if turnover increases," Akter H Sannamat, managing director of Union Capital told The FE.
"The turnover marked a rise in first seven months in FY 2013-14, compared to same period last fiscal year, so did tax," he said.
However, data showed that in the last three fiscal years, the revenue earnings of the government from the DSE declined at a stress due to lower turnover value following slide in shares prices.
In fiscal year 2010-11, DSE paid tax worth Tk 4.46 billion, in FY 2011-12 DSE paid worth Tk 2.72 billion and FY 2012-13 DSE paid tax worth Tk 1.27 billion on brokerage commission and share sales by sponsor-directors and placement holders.
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