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The government's revenue earnings from the Dhaka Stock Exchange (DSE) plunged 76 per cent month-on-month in May this year on the back of falling trade volume and value.
The government collected revenue worth Tk 101 million in May which was Tk 433 million in April, 2019, slumping by 76 per cent, according to data available with the DSE.
Of the total earnings in May, Tk 77 million came from the TREC (trading right entitlement certificate) holders' commission while Tk 24 million came from share sales by sponsor-directors and placement holders.
Market analysts said the sluggish trading activities coupled with low share sales by the sponsor-directors affected the government's revenue earnings from the prime bourse last month.
In April, the government earned Tk 363 million from share sales by sponsor-directors and placement holders which was only Tk 24 million May, which impacted overall earnings.The daily average turnover on the DSE stood at Tk 3.67 billion in May, which was Tk 3.50 billion in April, 2019, the DSE data shows.
DSEX, the prime index of the DSE, gained 91 points or 1.72 per cent during the month of May to close the month at 5,377 points.
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.
"The earnings are related to turnover. It's usual that tax will fall if turnover declines," said an analyst at a leading brokerage firm.
Meanwhile, the government collected revenue worth Tk 2,394 million in 11 months (July-May) in the current fiscal year, rising 7.94 per cent, from Tk 2218 million in the same period of the previous fiscal, the DSE data shows.
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.