The government revenue earnings from the Dhaka Stock Exchange (DSE) tumbled 50 per cent year-on-year in July 2022 on the back of falling turnover and reduced trading days.
The government collected revenue worth Tk 144 million in July 2022 which was Tk 289 million in the same month of the previous year, according to statistics from the DSE.
Market analysts said bearish market trend, lower share sales by sponsor-directors and reduced trading days due to Eid-holidays affected the government earnings from the DSE in July, the first month of the current fiscal year.
The panic-driven investors dumped their holdings almost throughout the month, taking the prime index below the 6,000-mark, which forced the Bangladesh Securities and Exchange Commission (BSEC) to impose 'floor price' to stop further fall.
DSEX, the prime index of the DSE, plunged 243 points or 3.81 per cent in July 2022 to close the month at 6,134.
Of the total earnings in July, Tk 128 million came from the TREC holders' commission, popularly known as brokerage commission, while nearly Tk 16 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.
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.
The prime bourse has deposited the amount through the electronic tax deducted at source (e-TDS) system to pay taxes to the public exchequer under Tax Zone-13 of the National Board of Revenue (NBR) using the e-TDS system.
The government earnings from the prime bourse dropped due to lower turnover and reduced trading days as earnings are related to turnover, said a DSE official.
"The earnings are related to turnover. It's usual that tax will fall if turnover declines," he said, adding that lower transactions impacted the government revenue earnings from the prime bourse in July.
The daily turnover, the important gauge, dropped to Tk 6.46 billion on average in July 2022. The average daily turnover was Tk 15.53 billion in July 2021.
However, the government's revenue earnings from the DSE hit an 11-year high to Tk 2.91 billion in the just concluded Fiscal Year (FY) 2021-2022.
The government's revenue earnings also registered a 10 years high to Tk 2.66 billion in the FY 2020-21 as turnover recorded a decade high in a few sessions in the last fiscal year.
The DSE paid tax worth Tk 2.72 billion in FY2011-12, Tk 1.27 billion in FY2012-13, Tk 1.54 billion in FY2013-14, Tk 1.74 billion in FY2014-15, Tk 1.58 billion in FY2015-16, Tk 2.46 billion in FY2016-17, Tk 2.33 billion in FY2017-18, Tk 2.51 billion in FY2018-2019 and Tk 1.04 billion in 2019-20 on TREC holders' commission and share sales by sponsor-directors & placement holders.
However, the DSE paid tax worth Tk 4.47 billion in the FY2010-11, the highest in its history, when the market witnessed a wild trend before crashing.