The government revenue earnings from the Dhaka bourse jumped 63 per cent in the first quarter (Q1) of the current fiscal year (FY) compared to the same quarter last fiscal as trading volume on the rise.
Market operators attributed the rise to the revenue from the Dhaka Stock Exchange (DSE) as buoyant investors took part in the trading with fresh enthusiasm.
The government bagged revenue worth about Tk 709 million in July-September quarter of the FY 2020-21, which was Tk 435 million in the same quarter of the previous fiscal year, according to statistics available with 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 Q1 of the current fiscal year, Tk 469 million came from the TREC holders' commission, popularly known as brokerage commission, while Tk 240 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.
The government earnings also rose 12 per cent month-on month in September as the government bagged revenue worth about Tk 275 million in September, which was Tk 246 million a month ago in August, the DSE data showed.
The government earnings from the prime bourse gradually rising as trading activities increasing riding on regulatory steps to restore discipline in the country's "The earnings are related to turnover. It's usual that tax will rise if turnover increased," said an analyst at a leading brokerage firm.
He noted that as the turnover marked rise during the period under review, so did the tax.
The daily average turnover on the DSE soared to Tk 10.12 billion in September, which was only Tk 9.80 billion in August, 2020, the DSE data shows.
DSEX, the prime index of the DSE, surged a cumulative 974 points or 24 per cent in July-September, 2020 quarter while the DSE market-cap recovered Tk 877 billion during the period under review.
Factors like lower returns on the money market, lucrative price level of listed securities and strong regulatory actions against wrongdoers helped buoy the market as well as the government earnings from the DSE, said a merchant banker.
The government's revenue earnings from the DSE hit more than 10 years low to Tk 1.04 billion in the last Fiscal Year (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.
