Transaction tax

DSE Generated Highest Revenue in 11 Years Due to Strong Increase in Revenue

Due to a surge in revenue from the country’s top stock exchange, government revenues have hit an 11-year high.

Government revenue collection from the Dhaka Stock Exchange (DSE) increased by 8.40% or Tk 24.43 crore in the just ended FY2022 compared to FY21.

According to DSE data, in FY22, the total transaction in the 240 working days was over Tk 3,18,720 crore.

This is the highest revenue collection since fiscal 2012. Previously, DSE paid taxes worth Tk 447 crore in fiscal 2011, the highest in its history, when the market experienced a “bubble” before collapsing.

According to DSE data, the National Board of Revenue (NBR) in FY22 collected Tk 290.88 crore in taxes, including turnover tax and sales tax. sponsor director shares from Tk 266.44 crore in FY21.

In FY22, the government generated Tk 218 crore in turnover tax, while the amount was Tk 180 crore in FY21.

A total of 72.87 crore of Tk came from sales of shares by sponsor directors and investment holders in the just ended financial year, while the figure was 86.28 crore of Tk for the FY21, according to EHR data.

Market insiders and analysts say the first eight months of the coming year have seen more trades than the whole of the previous year. Apart from this, six companies raised Tk 699.36 crore in the capital market through Initial Public Offering (IPO) in the outgoing year.

At the same time, the regulator allowed seven companies to issue bonds and withdraw Tk 5,500 crore from the capital market as these institutions are also listed.

By increasing both types of transactions, the government has drawn more revenue from the capital market.

Regarding the revenue generated by the Bangladesh Securities and Exchange Commission (BSEC), its Executive Director and Spokesperson Mohammad Rezaul Karim told Dhaka Tribune: “Last year, government revenue in this sector increased due to a high turnover. Since the new board took office, several steps have been taken to restore general investor confidence in the stock market.

“I think it’s a continuation of that,” he added.

According to data analysis, daily turnover at the DSE hit a ten-year high in a few sessions in fiscal 2021-22, particularly in August and September, as investors invested new funds in stocks.

However, the main stock exchange’s key index posted a moderate gain over the past fiscal year. Between July 1, 2021 and June 30, 2022, the DSEX increased by 157 points or 2.52% to stand at 6,377 Tk on June 30, 2022.

DSE paid taxes 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 FY2017-18, Tk 251 crore in FY2018-2019 and Tk104 crore in FY2019-20 on TREC holders commission and equity sales by managing sponsors and investment holders.

The DSE, on behalf of the State, collects tax in respect of the commission from TREC holders and from the sales of shares by sponsor-directors and investment holders at the rate of 0.05% and 5, 0% respectively and pays the amount to the Treasury.