The government's revenue earnings from the Dhaka Stock Exchange (DSE) slumped by 30 per cent month-on-month in April as share sales by sponsor-directors fell sharply.
Market insiders said low amount of shares sales by sponsor-directors due to the 'strict' lockdown mainly impacted the government's revenue earnings from the DSE in April.
A DSE official said sponsor-directors share' sell fell sharply in April as many of them (sponsor-directors) did not place their orders due to government imposed lockdown.
The government has imposed countrywide lockdown from April 5 and limiting people's movement to curb surging transmission of Covid-19 which rattled investor sentiment.
The key index of the DSE saw the biggest single-day fall in more than 12 months on April 4 as jittery investors dumped their holdings amid growing tension over impact of the virus-induced lockdown.
The bourses have also reduced trading time in line with the banking hours during the lockdown period.
The government bagged revenue worth Tk 194 million in April which was Tk 276 million in March, 2021, according to data from the DSE.
Of the total earnings in April, Tk 144 million came from the TREC (trading right entitlement certificate) holders' commission, popularly known as brokerage commission, while only Tk 50 million from the share sales by sponsor-directors.
In March, Tk 145 million came from the TREC holders' commission while 131 million from the share sales by sponsor-directors and placement holders, the DSE data shows.
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.
However, the government has earned about Tk 2.47 billion in the first 10 months (July, 2020 to April, 2021) of the current fiscal year, the DSE data shows.
However, 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 (March 26 to and May 30) due to Covid-19 outbreak.
The DSE official from the DSE remained satisfactory this fiscal year as the government earned about Tk 2.47 billion in the first 10 months of the current fiscal year.
"The earnings are related to turnover. It's usual that tax will fall if turnover declined," he said.
The daily average turnover on the DSE stood at Tk 6.70 billion on an average in April which was Tk 6.90 billion in March, 2021.
DSEX, the prime index of the DSE rose 201 points or 3.80 per cent in April, the bourse data showed.
The main bourse 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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