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Tax receipts from DSE fall 13pc in July

Sluggish trading activities hit revenue earnings


FE Report | Published: August 05, 2019 11:21:41 | Updated: August 06, 2019 10:39:09


FE file photo

The government's revenue earnings from the Dhaka Stock Exchange (DSE) fell 13 per cent year-on-year in July this year on the back of falling trade volume and value.

Market analysts said the bearish market trend coupled with sluggish trading activities hit the government's revenue earnings from the prime bourse.

The government bagged revenue worth Tk 195 million in July this year, the first month of the current fiscal year, which was Tk 225 million in July 2018, registering a decline of 13 per cent, according to statistics from the DSE.

Of the total earnings in July this year, Tk 90 million came from the TREC (trading right entitlement certificate) holders' commission, popularly known as brokerage commission.

And Tk 105 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.

The DSE, on behalf of the government, collects the tax as TREC holders' commission at a rate of 0.05 per cent and from 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 turnover value hit the government earnings from the DSE in the first month of the current fiscal year," 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.

He noted that as the turnover marked a decline in July this year compared to the same month last year, so did the tax.

The daily turnover, the important gauge, came down to Tk 3.83 billion on average in July 2019, down 55 per cent over the previous year's July. In July, 2018, daily average turnover was Tk 8.48 billion.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), also suffered 283 points or 5.22 per cent loss in July this year.

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 fiscal year 2010-11, the highest in its history, when the market witnessed a wild trend before crashing.

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