The government's revenue earnings from the Dhaka Stock Exchange (DSE) rose 54 per cent year-on-year in the first month of the current fiscal year as trading volume was on the rise.
Market analysts said on the back of rising trading volume, the government earnings from the Dhaka bourse rose accordingly, as earning is related to turnover.
The market turnover rose significantly as the buoyant investors have given boost to the capital market amid growing confidence riding on various regulatory reforms to bring disciple in the market, said a merchant banker.
The government bagged revenue worth Tk 289 million in the first month of the FY 2021-22, which was Tk 188 million in the same month in the FY 2020-21, registering an increase of 54 per cent, according to data available with the DSE.
Of the total earnings in July 2021, Tk 233 million came from the TREC holders' commission, popularly known as brokerage commission, while Tk 56 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.
In July last fiscal year, Tk 60 million came from the TREC holders' commission and Tk 128 million came from the share sales by sponsor-directors and placement holders.
However, month-on-month, the government earnings from DSE fell by 46 per cent in July as the government raked in Tk 544 million in June, 2021.
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.
A DSE official said the government earnings from the prime bourse rose as trading volume increased substantially in July, the first month of the FY2021-22, which helped higher revenue collection.
"The earnings are related to turnover. It's usual that tax will rise if turnover increases," he said.
He noted that as the turnover marked an increase in the first month of the current fiscal year compared to the previous fiscal year's July, so did the tax.
The daily turnover, the important gauge, jumped to 15.53 billion on average in July 2021, soaring 445 per cent over the previous fiscal year's July of Tk 2.85 billion.
DSEX, the prime index of the DSE, rose 275 points or 4.47 per cent in July 2021.
The government's revenue earnings from the DSE registered a 10 years high to Tk 2.66 billion in the FY 2020-21 as the DSE turnover recorded a decade high in few sessions in the last fiscal year.
The country's capital market also posted the highest return of 54 per cent in a decade in the FY 2020-21 despite ongoing pandemic.
However, in the FY 2019-20, the government's earnings from the DSE plunged more than 10 years low to Tk 1.04 billion due to sluggish market turnover coupled with trading suspension for more than two months due to Covid-19 outbreak.
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 and Tk 2.51 billion in FY2018-2019 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 FY2010-11, the highest in its history, when the market witnessed a wild trend before crashing.