The government's revenue earnings from the Dhaka Stock Exchange (DSE) fell 21 per cent month-on-month in October as trading volume was on the decline.
Market analysts said declining trading activities coupled with lower share sales by sponsor-directors affected the government's earnings from the main bourse in October this year.
The government bagged revenue worth Tk 216 million in October this year which was Tk 275 million a month ago in September, according to data 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.
The DSE, on behalf of the government, collects 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.
Of the total earnings in the month, more than Tk 170 million came from the TREC holders' commission, popularly known as brokerage commission, while nearly Tk 46 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.
A DSE official said lower trading activities hit the government earnings from the prime bourse in October compared to September.
He noted that the earnings are related to turnover. It's usual that tax will fall if the turnover declines.
He, however, said overall revenue earnings from the DSE remained high in four months of the current fiscal year riding on regulatory moves to restore discipline in the country's capital market.
The government earnings from the DSE jumped 69 per cent in four months (July-October) for the current fiscal year compared to the previous fiscal year.
The government bagged revenue worth Tk 925 million in July-October period for the FY 2020-21, which was Tk547 million in the same period of the previous fiscal year, the DSE datashowed.
The daily average turnover stood at Tk 8.50 billion in October, which was 16 per cent lower than the previous month's average of Tk 10.12 billion.
DSEX, the prime index of the prime bourse, also eroded 149 points or 2.98 per cent to stand at 4,846 points on October 30, 2020.
The government's revenue earnings from the DSE hit more than 10 years low to Tk 1.04 billion in the last FY 2019-20 due to bearish market trend and suspension of trading activities for more than two months due to Covid-19 outbreak.
The DSE paid tax worth Tk 2.72 billion in FY 2011-12, Tk 1.27 billion in FY 2012-13, Tk 1.54 billion in FY 2013-14, Tk 1.74 billion in FY 2014-15, Tk 1.58 billion in FY 2015-16, Tk 2.46 billion in FY 2016-17, Tk 2.33 billion in FY 2017-18 and Tk 2.51 billion in FY 2018-2019 on TREC holders' commission and share sales by sponsor-directors and placement holders.
However, the DSE paid tax worth Tk 4.47 billion in the FY 2010-11, the highest in its history, when the market witnessed a wild trend before crashing.
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