Govt earnings from Dhaka bourse slump 37pc in August 2018

FE Report | Published: September 06, 2018 10:33:09 | Updated: September 13, 2018 12:01:45

FE file photo used for representation

The government's revenue earnings from the Dhaka bourse fell 37 per cent month-on-month in August this year on the back of falling trade volume and value.

Market insiders said sluggish trading activities coupled with lower trading days due to Eid vacation affected the government's earnings from the prime bourse as the earning is related to turnover.

There were only 18 trading days in August as against 22 in the month of July.

The daily turnover, the important gauge, came down to Tk 6.38 billion on average in August which was Tk 8.48 billion in July, falling 25 per cent.

The government bagged tax worth Tk 142 million in August which was Tk 225 million in July 2018, registering a decline of 37 per cent, according to statistics from the Dhaka Stock Exchange.

Of the total earnings in August this year, Tk 115 million came from the TREC (trading right entitlement certificate) holders' commission, popularly known as brokerage commission.

And Tk 27 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 August," 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 August this year compared to July, so did the tax.

However, DSEX, the prime index of the Dhaka Stock Exchange (DSE), added 298 points or 5.62 per cent in August riding on bank and financial stocks.

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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