The government's tax receipts from brokerage commission declined nearly by a half last fiscal year as a continuous downtrend reduced share transactions drastically on the Dhaka bourse.

The government received

Tk 169 crore in tax on brokerage commission in fiscal 2011-12, a 48 percent decline in tax collection over the previous fiscal year's Tk 326 crore.

The government also bagged Tk 102 crore in tax on share sales by sponsor shareholders and placement holders last fiscal year, registering a 16 percent fall over the previous year.

The decline in tax on brokerage commission, according to a fortnightly and a half yearly publication of the Dhaka Stock Exchange, was due to a massive fall in share transactions, both in terms of value and volume, on the premier bourse during the period.

Since January last year, when the market witnessed a debacle in share prices after an abnormal rise before, a downtrend has been continuing in the market.

Last year, the benchmark index of the prime bourse, DGEN, came down by 26 percent, while the value and volume dropped by 74 percent and 59 percent respectively.

On June 28 this year, the last trading day of fiscal 2011-12, the DGEN came down to 4,572 points from 6,157 points a year ago. The daily transaction value dropped to Tk 300 crore from Tk 1,139 crore, while the volume came down to six crore shares from 14.69 crore during the period.

Usually, the DSE management first collects the tax from stockbrokers on sell-buy commission and then submits the total amount to the National Board of Revenue at a rate of 0.05 percent.

The stockbrokers' contribution to the state coffer saw the decline due mainly to a massive fall in share transactions, both in value and volume, said Shuvra Kanti Choudhury, chief financial officer of the DSE.

“It is obvious that tax collection from the stockbrokers will fall if share transaction volume and value decline,” he said.

The Daily Star/Bangladesh/ 22th July 2012