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The government's revenue earnings from Dhaka Stock Exchange (DSE) marked a whopping 85 per cent rise in the first quarter (Q1) of the current fiscal year, compared to the same period of the previous fiscal.
With the rising trading volume, government's earnings from the prime bourse also swelled accordingly as earning is related to market turnover, according to market analysts.
The market turnover increased significantly during the period under review as the buoyant investors have given a boost to the capital market amid growing confidence in the market, said a merchant banker.
The government bagged revenue worth Tk 1,311 million in July-September period of the Fiscal Year (FY) 2021-22, as against Tk 709 million in the same period of the previous fiscal year, registering a 85 per cent growth, according to DSE statistics.
Of the total earnings in July-September, Tk 1,191 million came from the tax on TREC (Trading Right Entitlement Certificate) holders' commission, popularly known as brokerage commission, while Tk 120 million came from the tax on share sales by sponsor-directors and placement holders, the DSE data show.
In the same period of the last fiscal year, Tk 469 million came from the tax on TREC holders' commission and Tk 240 million from the tax on share sales by sponsor-directors and placement holders.
The DSE, on behalf of the government, collects the tax on TREC holders' commission and share sales at the rate of 0.05 per cent and 5.0 per cent respectively and deposits the amount to the government exchequer.
The government earnings from the DSE also rose by 3.60 per cent month on month in September 2021.
A DSE official said the government earnings from the prime bourse jumped as trading volume increased substantially during the period under review, which contributed to higher revenue collection.
"The earnings are directly related to turnover. So, tax will rise if turnover increases," he said.
He noted that as the turnover marked an increase in July-September this year, compared to that of the previous fiscal, so did the tax.
The daily turnover, an important gauge, jumped to Tk 21.56 billion on average in July-September period of the current fiscal year, as investors put fresh funds on stocks.
DSEX, the prime index of the DSE, also gained 1,179 points or 19 per cent in the first three months of the current fiscal year.
The government's revenue earnings in the FY 2020-21 from the DSE hit a 10-year high at Tk 2.66 billion, as the DSE turnover recorded a decade-high in few trading 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.
In the FY 2019-20, however, the government's earnings from the DSE dropped below the 10-year low to Tk 1.04 billion due to sluggish market and suspension of trading for more than two months due to Covid-19 outbreak.
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 2018-19 on TREC holders' commission and share sales by sponsor-directors and placement holders.
The DSE paid tax worth Tk 4.47 billion in the FY 2010-11, the highest in its history, when the market witnessed a bullish trend before crashing.