The government’s tax collection from the Dhaka Stock Exchange dropped by 16 per cent or Tk 45 crore in last fiscal year (2017-18) compared with that in the previous fiscal year (2016-17) as the market was mostly sluggish in the second half of FY18.
The National Board of Revenue in FY18 received Tk 237 crore from the DSE against its receipt of Tk 282 crore in FY17.
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.
In FY18 the revenue board received Tk 159.03 crore as tax on turnover against Tk 180.29 crore in the previous fiscal year.
The tax on sponsor-directors’ capital gains, however, hit a five-year high in FY18 to Tk 74.12 crore from that of Tk 66.23 crore in FY17.
The government’s tax collection from the capital market depends mainly on turnover and sponsor-directors’ capital gains from share sales, DSE officials said.
The total turnover at the bourse dropped by 11.88 per cent to Tk 1,59,085.2 crore in FY18 from Tk 1,80,522.2 crore in FY17.
The daily average turnover declined to Tk 646.6 crore in FY18 (246 trading days) compared with that of Tk 755.3 crore in FY17 (239 trading days).
The market was mostly bearish in the second half (January-June) of FY18 due to a number of reasons including crisis in the financial market, political turmoil, uncertainities over the DSE’s share sales to a strategic partner, and heavy sell-offs by the overseas investors that hit the investors’ sentiment one after another, market opertors said.
The average turnover stood at Tk 828.50 crore in the July-December period of FY18 (125 trading sessions) that dropped to Tk 456.73 crore in the January-June period of the fiscal year (121 trading sessions).
On December 28, 2017, the DSEX, the key index of the country’s premier bourse, was 6,244.52 points that declined to 5,405.46 points at the end of June 2018.
The government’s tax collection from the DSE hit its all-time high in the fiscal year of 2010-11 to Tk 447.28 crore amid a market bubble that later bust, DSE officials said.
The revenue collection from the sector, however, declined gradually in the following years due to a prolonged market depression after the market crash at the end of 2010.
The NBR collected Tk 271.69 crore in tax from the DSE in FY12, Tk 127.29 crore in FY13 and Tk 153.85 crore in FY14. The revenue board, however, received Tk 209 crore in tax in FY15 from the bourse, but the amount dropped to Tk 193.59 crore in FY16.
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