The government's revenue earnings from the Dhaka bourse fell 30 per cent in the first quarter (Q1) of the current fiscal year (FY) compared to the same quarter a year ago as trading volume was on the decline.
Market insiders said sluggish trading activities coupled with low share sales by sponsor-directors affected the government's revenue earnings from the prime bourse in the Q1 of the FY2018-19.
The government bagged revenue worth about Tk 582 million in July-September quarter of the current FY which was Tk 831 million in the same quarter a year ago, according to statistics from the Dhaka Stock Exchange (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 (trading right entitlement certificate) 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 450 million came from the TREC holders' commission, popularly known as brokerage commission while Tk 132 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.
However, month-on-month, the government earnings from DSE rose 51 per cent in September as the total revenue collection stood at Tk 215 million in September which was Tk 142 million in August 2018, the DSE data shows.
A DSE director said declining turnover value hit the government earnings from the DSE in the first quarter of the current fiscal year.
"The earnings are related to turnover. It's usual that tax will fall if the turnover declines," said an analyst at a leading brokerage firm.
Between July 1 and September 30 of the current fiscal year, DSEX, the prime index of the DSE, fell 36.50 points to reach at 5,368 on September 30, 2018. However, DSEX eroded 232 points alone in September.
The daily average turnover for the July-September quarter of the current fiscal year came down to Tk 7.40 billion which was about Tk 10 billion in the same quarter in the previous fiscal.
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 and Tk 2.33 billion in FY 2017-18 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 fiscal year 2010-11, the highest in its history, when the market witnessed a wild trend before crashing.
