The government collected over Tk112m in tax from stock trading on Dhaka Stock Exchange in August, down more than 26% from the previous month due to ongoing bearish market.
Of the total earnings, Tk71m comes from brokerage commission and about Tk41m on sales of shares by sponsor-directors and placement holders, according to the prime bourse.
The DSE collects the turnover tax as brokerage commission from the investors at 0.05% rate and it collects gain taxes at 5% rate from the sponsors-directors’ share sales as per the Income Tax Ordinance.
Transactions in the market were on the decline in recent times as looming political chaos in the run up to the general election put a damper on investor sentiment, said brokers.
Total volume of trade in August was 1.3bn, a drop of 43.5% from 2.3bn in July and turnover in value was Tk71.5bn, a fall of 43.8% from Tk127.2bn in July.
Tax collection depends on trading volume and value, so more trading of stocks generates more tax for the government, said a DSE official. Lower volume of trade brings lower amount of earnings for the government, he said.
From January to June this year, the government earned about Tk522m in tax through brokerage commission and Tk128m in tax from share sales by sponsor shareholders and placement holders.
Tax collection by the government had hit a record high in November 2010 when it received Tk477m.
