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The Financial Express

Sluggish turnover hits DSE earnings

Tax receipts slump 39pc in 7 months


Babul Barman | Published: February 04, 2020 11:48:41 | Updated: February 05, 2020 11:51:32


Investors monitoring stock price movements on computer screens at a brockerage house in the capital — FE/Files Investors monitoring stock price movements on computer screens at a brockerage house in the capital — FE/Files

The government's revenue earnings from the Dhaka bourse slumped 39 per cent in seven months in the current fiscal year as trading volume was on the decline.

Market analysts said sluggish trading activities coupled with low share sales by sponsor-directors affected the government's earnings from the Dhaka Stock Exchange during the period under review.

The government bagged revenue worth Tk 846 million in July-January period of the fiscal year 2019-20 which was Tk 1,394 million in the same period of the previous fiscal, 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 during the period, Tk 541 million came from the TREC holders' commission, popularly known as brokerage commission, while Tk 305 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.

However, the government earnings from the DSE rose 30 per cent month-on-month in January, 2020 compared to December 2019, according to DSE data.

The government bagged revenue worth about Tk 119 million in January 2020 which was Tk 91 million in December, 2019.

A leading broker said depressed market trend coupled with falling turnover value hit the government earnings from the prime bourse.

He noted that the earnings are related to turnover. It's usual that tax will fall if the turnover declines.

The daily average turnover for the July-January period of the current fiscal year came down to Tk 4.30 billion, which was Tk 7.40 billion in the same period in the previous fiscal.

Between July 1 and January of the current fiscal year, DSEX, the prime index of the DSE, eroded 952 points or 18 per cent to stand at 4,469 points on January 30, 2020.

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.

babulfexpress@gmail.com

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