The government's revenue earnings from the Dhaka Stock Exchange (DSE) fell by 28% in October compared to September this year due to a significant decrease in turnover.
Stock market analysts and insiders said that the bearish market trend coupled with sluggish trading activities hit the government's revenue earnings from the prime bourse.
National Board of Revenue (NBR) in October of this year collected Tk11.23 crore in tax from the DSE that includes tax on turnover and tax on sponsor-directors’ share sales as compared to Tk15.66 crore collected month ago, down by Tk4.43 crore.
The DSE, on behalf of the NBR, collects the tax as TREC holders’ commission on share trade at a rate of 0.05% and from sponsor-directors' and placement holders' shares sales at a rate of 5.0%. The DSE then deposits the amount to the public exchequer.
Market operators said that the unstable condition in the financial sector as well as in the capital market could be a major reason for the decrease in tax collection from the Dhaka bourse in October. The trading environment in the country’s main capital market started to get unstable at the end of January of this year, and the situation hasn’t improved since.
The market capitalization at the DSE decreased about Tk65, 000 crore in the last nine months. The prime index, DSEX, lost 1,200 points, since the index hit its highest point at 5,950 in January 24 of this year. Meanwhile, the daily turnover at the Dhaka bourse has been Tk300 crore on average in last few months.
The government tax collection from the DSE hit a record single-month high in November, 2010, as it received a robust amount of Tk47.71 crore in taxes from the Dhaka bourse, thanks to a healthy and bullish stack market environment.
