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Turnover tax from DSE falls 21% in November

  • Published at 10:12 pm December 1st, 2019
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According to stock market analysts and insiders, a significant decrease in share sales of sponsor-directors and placement holders turned into less revenue for the government

The government's tax income from the Dhaka Stock Exchange (DSE) fell by 21% in November compared to October this year due to a significant decrease in share sales of sponsor-directors and placement holders.

The National Board of Revenue (NBR) collected Tk8.85 crore in tax from the DSE in November this year, including tax on turnover and sponsor-directors’ share sales, as compared to Tk11.23 crore collected a month ago, down by Tk2.38 crore or 21%.

According to stock market analysts and insiders, a significant decrease in share sales of sponsor-directors and placement holders turned into less revenue for the government.

Meanwhile, bearish market trend coupled with sluggish trading activities hit the government's revenue earnings from the prime bourse.

Market operators said 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 November. 

The trading environment in the country’s main capital market started to get unstable at the end of January this year, and the situation has not improved since. 

The DSE, on behalf of the NBR, collects the tax as Trading Right Entitlement Certificate (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.

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.

The market capitalization at the DSE decreased about Tk65,000 crore in the last 10 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 Tk400 crore on average in last few months.