Kathmandu. The slowdown in the stock market has taken a big hit to the government’s income. The government has not been able to get revenue from the stock market as per the target as the NEPSE has been running sideways for a long time.
The government’s main source of income from this market is the capital gains tax received from share trading. However, the shareholders are not convinced by the single government of the Rastriya Swatantra Party (RSP). Despite the strong economic indicators, big investors are reluctant to enter the market as the government has not taken much initiative to bring the stock market back on track.
The NEPSE index has been sluggish due to the lack of investors’ confidence and the trading has not been very encouraging. It has also had a direct impact on the government’s income.
CDSC for the current fiscal year 2082. According to the data of the 11 months of the current fiscal year, the government has collected Rs 9.54 billion in capital gains tax from the share market. Last fiscal year 2081. The government had collected Rs 15.27 billion in capital gains tax till April 1980. The amount of capital gains tax has decreased by 37.50 percent in the review period compared to the previous year.
There is a provision that the investors are liable to pay capital gains tax on the profits received while trading in shares. Currently, an individual investor has to pay 7.5 percent capital gains tax if he sells shares bought before one year and 5 percent if he sells it after one year. Institutional investors have to pay 10 percent capital gains tax.
The government had collected the highest amount of capital gains tax from the share market in the current fiscal year. The government had collected Rs 2.15 billion in capital gains tax in the review period. However, it was down almost 50 percent compared to the same period last year.
Similarly, the government had collected Rs 1.73 billion in capital gains tax in April and Rs 1.29 billion in January of the current fiscal year.
The current government is in the coming fiscal year 2083. The Finance Bill, which was introduced after 84 BS, has increased the rate of capital gains tax from the stock market. Now, an individual investor will have to pay 10 percent capital gains tax on the sale of shares purchased before one year and 7.5 percent if sold after one year. However, the government has made it clear that capital gains tax is the final tax.
