Nepal’s investing community looks forward to the Honorable Finance Minister delivering the national fiscal year 2081/82 budget on Jestha 15, 2081. Investors believe the next budget will include initiatives to strengthen the capital market sector.
Currently, the Securities Board of Nepal applies a withholding tax on capital gains on stocks available on the Nepal Stock Exchange. Investors who keep their shares for more than 365 days have to pay a 5% capital gains tax, whereas those who hold them for less than 365 days pay a 7.5% tax.
Key Points on Nepal Capital Gains Tax Reform in 2081/82 Budget
| Detail | Information |
| Budget Presentation Date | Jestha 15, 2081 |
| Fiscal Year | 2081/82 |
| Current Tax on Capital Gains (>365 days) | 5% |
| Current Tax on Capital Gains (≤365 days) | 7.5% |
| Proposed Short-term Capital Gains Tax | 5% |
| Proposed Long-term Capital Gains Tax | 3% |
| Goal of Proposed Amendments | Increase individual participation, simplify tax processes, boost investor confidence, increase trading volumes, enhance government revenue |
Investor associations are pushing for revisions to current tax regulations. They propose changing the withholding tax to a final tax and altering the Income Tax Act’s schedules. Specifically, they suggest lowering the short-term capital gains tax (for shares held for 365 days or less) to 5% and the long-term capital gains tax (for shares held for over 365 days) to 3%.
These suggested changes aim to boost individual participation in the stock market, simplify tax collection, and improve record-keeping efficiency. The investment community believes these reforms will enhance investor confidence, increase trading volumes, and ultimately raise government tax revenues.
Investor groups have consistently communicated these proposals to the Ministry of Finance through multiple letters. They remain hopeful that the Ministry understands their concerns and recognizes the urgent need for reform in the capital market sector.
Press Release for आयकर ऐनमा गर्नुपर्ने संशोधन (Amendments to the Income Tax Act)
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