The government’s revenue earnings from the Dhaka Stock Exchange fell 21 per cent month-on-month in November this year as trading volume was on the decline.
Market analysts said sluggish trading activities coupled with low share sales by sponsor-directors continued to hit the government’s earnings from the prime bourse.
The government bagged revenue worth about Tk 89 million in November, 2019 which was Tk 112 million a month ago, 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 November, Tk 74 million came from the TREC holders’ commission, popularly known as brokerage commission, while nearly Tk 15 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.
A leading broker said sluggish 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-November period of the current fiscal year came down to Tk 4.20 billion, which was Tk 7.30 billion in the same quarter in the previous fiscal.
Between July 1 and November 28 of the current fiscal year, DSEX, the prime index of the DSE, also eroded 690 points to stand at 4,731 on November 28, 2019.
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.