The government's revenue earnings from the Dhaka Stock Exchange (DSE) fell 38 per cent year-on-year in eight 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 revenue earnings from the prime bourse during the period under review.
The government bagged revenue worth Tk 1,001 million in July-February of the fiscal year (FY) 2019-2020 which was Tk 1,627 million in the same period of last 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 during the period, Tk 665 million came from the TREC holders' commission, popularly known as brokerage commission, while Tk 336 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.
However, the government earnings from the prime bourse rose 30 per cent month-on-month in February compared to January 2020, the DSE data showed.
The government bagged revenue worth about Tk 155 million in February which was Tk 119 million in January 2020.
Depressed market trend coupled with falling turnover value hit the government earnings from the prime bourse, said an analyst.
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-February period of the current fiscal year came down to Tk 4.25 billion, which was Tk 7.30 billion in the same period in the previous fiscal.
Between July 1 and February 27 of the current FY, the DSEX eroded 904 points or 17 per cent to reach at 4,480 on February 27, 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.
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