The government revenue earnings from the Dhaka Stock Exchange (DSE) marked 21 per cent rise year-on-year in the just-concluded fiscal year (FY) as the trading volume was on the rise.
The government bagged tax worth around Tk 1.54 billion in the FY 2013-2014 on brokerage commission and share sale by sponsor-directors and placement holders which was around Tk 1.27 billion in the FY 2012-13, according to statistics from the Dhaka Stock Exchange (DSE).
The month-on-month tax collection from DSE also rose 24.47 per cent in June compared to May, 2014. In June, the government earned tax worth Tk 120.85 million from DSE while it was Tk 97.09 million in May.
The DSE, on behalf of the government, collects the tax as brokerage 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.
Tax collection was record high in the FY 2010-2011 when the market was bullish.
The prime index of the DSE was 4,224.16 points in the first trading day of the fiscal year 2013-14 while it stood at 4,480.52 points in the last trading day of the outgoing fiscal, rising 256.36 points or 6.02 per cent during the period.
The daily average turnover in the just concluded FY was Tk 4.71 billion, which was 3.70 billion in the previous fiscal year, the DSE data showed.
Tax collection is related to trading volume and value. More trading of stocks generates more tax for the government, said a DSE official.
"Tax collection increased in the just concluded fiscal year due to higher transactions with a recovering tone from the prolonged downtrend in share prices since the market debacle two and a half years ago," he said.
"The revenue 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.
Country's stock market that had received severe mauling in 2010 has been able to regain some stability in the outgoing fiscal (2013-14) but not the desired level of buoyancy, said an analyst
DSE 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 highest tax worth Tk 4.47 billion, in FY 2011-12 it paid worth Tk 2.72 billion and the bourse paid tax worth Tk 1.27 billion in FY 2012-13 on brokerage commission and share sales by sponsor-directors and placement holders.
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