Staff Correspondent: The government’s tax collection from the Dhaka Stock Exchange (DSE) halved in the last fiscal year (FY) 2019-20 compared with that in the fiscal year (FY) 2018-19 as the market was closed for trading for 66 days due to coronavirus outbreak.
The government’s revenue earnings from the Dhaka Stock Exchange (DSE) hit more than 10 years low to Tk 104 crore in the just concluded FY 2019-20 against Tk 251 crore in FY 2018-19, registering a decline of 58 per cent, according to statistics from the DSE. It was also the lowest revenue earnings from the DSE since the stock market debacle in the FY 2010-11.
Market operators said the sluggish market turnover coupled with trading suspension for more than two months due to Covid-19 outbreak hit the government’s revenue earnings from the prime bourse.
Trading on the bourses remained shut for 66 days (March 26 to May 30), the longest closure of the market since the Liberation War, due to government holidays as part of its efforts to contain the spread of the deadly Covid-19 virus.
Of the total earnings in the FY2019-20, Tk 68.9 crore came from the TREC (trading right entitlement certificate) holders’ commission, popularly known as brokerage commission. And Tk 34.6 crore came from the share sales by sponsor-directors and placement holders.
As per the Income Tax Ordinance 1984, the DSE collects 0.05 per cent tax on turnover and 5 per cent tax on capital gains from share sales by sponsor-directors and placement holders.
The total turnover at the bourse dropped by 46.63 per cent to Tk 78,024.37 crore in FY2020 from Tk 1,46,193.04 crore in FY2019.
The daily turnover, the important gauge, came down to Tk 381 crore on average in the FY 2019-20, down 38 per cent over the previous fiscal’s average of Tk 614 crore.
The daily turnover at the DSE also dropped to a 13-year low twice in June as investors were unwilling to buy shares even at the lowest possible prices amid growing concerns over the Covid-19 pandemic and floor price limitation.
DSEX, the benchmark index of the DSE, lost 1,432 points or 26.56 per cent in the just concluded fiscal year. Market capitalisation of the prime bourse also shed 22 per cent in the outgoing financial year to Tk 3,119 billion.
The DSE collected tax worth Tk 272 crore in FY 2011-12, Tk 127 crore in FY 2012-13, Tk 154 crore in FY 2013-14, Tk 174 crore in FY 2014-15, Tk 158 crore in FY 2015-16, Tk 246 crore in FY 2016-17, Tk 233 crore in FY 2017-18 and Tk 251 crore in FY 2018-2019. However, the DSE paid tax worth Tk 447 crore in the FY2010-11, the highest in its history, when the market witnessed a wild trend before crashing.
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