Tax receipts from DSE down 22pc in October

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Tax receipts from DSE down 22pc in October

The government’s revenue collection from Dhaka Stock Exchange (DSE) plunged by 22 per cent or Tk 113 million in October compared to a month earlier due to a decline in turnover on the prime bourse.

The government bagged revenue worth Tk 407 million in October as against Tk 520 million in September, falling nearly 22 per cent, according to DSE statistics.

Of the total earnings in October, Tk 370 million came from the TREC holders’ commission, popularly known as brokerage commission, while Tk 37 million came from share sales by sponsor-directors and placement holders, the DSE data shows.

Market insiders said the government earnings from the prime bourse fell in October compared to September due to lower turnover, as earnings are related to turnover.

The daily turnover, the important gauge, dropped to Tk 18.50 billion on average in October which was around Tk 23 billion in September, according to DSE data.

The prime index of the DSE also plunged by 329 points or 4.48 per cent in October compared to September this year.

However, the government’s revenue earnings from the DSE marked a whopping 86 per cent rise in the first four months of the current fiscal year compared to the same period of the previous fiscal.

The government bagged revenue worth Tk 1,718 million in July-October of the fiscal year (FY) 2021-22, as against Tk 925 million in the same period of the previous fiscal year, registering a 86 per cent growth, the DSE data showed.

A DSE official said the government earnings from the prime bourse fell slightly in October compared to a month earlier as trading volume declined in October.

However, he said, the overall tax collection remained on the right track as the government earnings from the DSE marked an increase in the July-October period.

Of the total earnings in the current fiscal year, Tk 1,561 million came from the TREC holders’ commission, while Tk 157 million came from the share sales by sponsor-directors and placement holders.

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.

The daily turnover jumped to Tk 20.38 billion on average in July-October period of the current fiscal year.

DSEX, the prime index of the DSE, also gained 850 points or 14 per cent in the first four months of the current fiscal year for July-October period.

Meanwhile, the government’s revenue earnings from the DSE registered 10 years high to Tk 2.66 billion in the FY 2020-21 as the DSE turnover recorded a decade high in a 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.

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

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