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Govt earnings from DSE fall 14pc in July-January

Babul Barman | Published: February 05, 2019 10:50:21 | Updated: February 06, 2019 10:35:52


The government revenue earnings from the Dhaka Stock Exchange (DSE) fell 14 per cent in July-January period of the current fiscal year on the back of falling trade volumes.

Market insiders said sluggish market trend coupled with low share sales by sponsor-directors and placement holders during the period affected the government revenue earnings from the prime bourse.

The government collected revenue worth Tk 1394 million in seven months (July-January) in the current fiscal year which was Tk 1613 million in the corresponding period of the previous fiscal, the DSE data shows.

However, the government earnings from the DSE rose sharply by 126 per cent month-on-month in January 2019 to Tk 326 million amid rising trading activities after the national elections.

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 (trading right entitlement certificate) 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 daily average turnover rose to Tk 9.72 billion in January this year which was only Tk 4.96 billion in December 2018.

The prime index of the DSE slumped 859 points or 14 per cent to close the year at 5,385 in 2018.

However, DSEX, the prime index of the DSE, recovered 436 points or 8.10 per cent in January alone, the first month of 2019.

Market analysts said on the back of rising trading volume in January, the government earnings from the prime bourse rose accordingly despite decline in overall earnings.

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

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.

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