The Financial Express

Sluggish DSE turnover hits govt revenue

| Updated: June 09, 2018 11:20:26

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Sluggish DSE turnover hits govt revenue

The government's revenue earnings from the Dhaka bourse fell 27 per cent month-on-month in May this year on the back of falling trade volume and value.

Market insiders 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.

The daily average turnover in May came down to Tk 4.60 billion while the average turnover was Tk 5.48 billion in April, registering a decline of 16 per cent, according to statistics from the Dhaka Stock Exchange (DSE).

DSEX, the prime index of the DSE, also fell 396 points or 6.90 per cent during the month of May.

The government bagged tax worth Tk 161 million in May against Tk 220 million in April 2018, falling more than 27 per cent, the DSE data shows.

Of the total revenue earnings in May, Tk 97 million came from the TREC (trading right entitlement certificate) holders' commission, popularly known as brokerage commission, and Tk 64 million from the share sales by sponsor-directors and placement holders, the DSE data showed.

The DSE, on behalf of the government, collects tax as TREC holders' commission at a rate of 0.05 per cent and, sponsor-directors and placement holders' shares sales at a rate of 5.0 per cent. The DSE then deposits the amount to the public exchequer.

"Declining the turnover value hit the government earnings from the prime bourse in May," said an official of the premier bourse.

"The earnings are related to turnover. It's usual that tax will fall if turnover declines," said an analyst at a leading brokerage firm.

"As the turnover marked a decline in May, compared to April, so did the tax," he added.

The government earnings from the DSE in 11 months for July-May period of the current fiscal year (FY) also fell marginally by 5.29 per cent.

The total revenue collection stood at Tk 2,218 million in 11 months in FY 2017-18 which was Tk 2,342 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 and Tk 2.46 billion in FY 2016-17 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.

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