The government revenue earnings from the Dhaka bourse fell 12 per cent month-on-month in October this year on the back of falling trade volumes.
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 October.
The daily average turnover in October came down to Tk 5.18 billion while average turnover was Tk 7.40 billion in September, registering a decline of 30 per cent, according to statistics from the Dhaka Stock Exchange (DSE).
The government collected tax worth Tk 189 million in October against Tk 215 million in September 2018, falling more than 12 per cent, 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 (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.
The government earnings from the prime bourse also fell 28 per cent in four months of the current fiscal year (FY) compared to the same period of the previous fiscal.
The government bagged revenue worth Tk 771 million in July-October period of the FY 2018-2019 against Tk 1,064 million in same period of the previous fiscal, the DSE data shows.
Of the total earnings in October, Tk 127 million came from the TREC holders' commission, popularly known as brokerage commission, while Tk 62 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.
A DSE director said declining turnover value hit the government earnings from the DSE.
"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 October 31 of the current fiscal year, DSEX, the prime index of the DSE, fell 121 points to come down to 5,284 on October 31, 2018. DSEX eroded 84 points alone in October.
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.
