The government revenue earnings from the Dhaka Stock Exchange (DSE) dropped by 19 per cent month-on-month in May on the back of falling turnover value.
The government collected revenue worth Tk 176 million in May which was Tk 218 million in April 2022, falling over 19 per cent month-on-month, according to statistics from the DSE.
Market analysts said bearish market trend, lower share sales by sponsor-directors and reduced trading days due to Eid-holidays affected the government earnings from the premier bourse in May.
The investors mostly followed a "go-slow" strategy throughout the month amid persistent volatility which diluted the government earnings as earnings are related to turnover, according to a leading broker.
DSEX, the prime index of the DSE, fell 263 points or 3.95 per cent in May to close the month at 6,392. The daily average turnover also came down to Tk 8.03 billion during the month.
However, the government earnings from the DSE rose over 31 per cent year-on-year in 11 months for July 2021 to May 2022 of the current fiscal year.
The government bagged revenue worth Tk 3,650 million in 11 months for July-May of the Fiscal Year (FY) 2021-22, as against Tk 2,778 million in the same period of the previous fiscal, 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.
The prime bourse has deposited the amount through the electronic tax deducted at source (e-TDS) system to pay taxes to the public exchequer under Tax Zone-13 of the National Board of Revenue (NBR) using the e-TDS system.
A DSE official said although the government earnings from the prime bourse fell month-on-month in May, the overall revenue earnings remain high in 11 months of the current fiscal year.
"The earnings are related to turnover. It's usual that tax will rise if turnover increases," he said.
The government's revenue earnings from the DSE registered a 10 years high to Tk 2.66 billion in the FY 2020-21 as turnover recorded a decade high in few sessions in the last fiscal year.
However, in the FY 2019-20, the government's earnings from the DSE plunged more than 10 years low to Tk 1.04 billion due to sluggish market turnover coupled with trading suspension for more than two months due to Covid-19 outbreak.
However, the DSE paid tax worth Tk 4.47 billion in the FY2010-11, the highest in its history, when the market witnessed a wild trend before crashing.
