KATHMANDU, July 29: The government collected capital gains tax (CGT) worth Rs 10.35 billion from the stock exchange market in the Fiscal Year (FY) 2025/26.
According to the CDS and Clearing Limited, the CGT collection last FY reduced by 37.42 percent compared to the amount in the previous FY due to a heavy fall in the share transaction in the review period. In FY 2024/25, CGT collection stood at Rs 16.54 billion.
Until the last FY, short-term investors were required to pay 7.5 percent tax on profits earned within a year while long-term investors had to pay 5 percent on profits out of the shares held for longer periods. From this year, the rates have been increased to 10 percent and 7.5 percent, respectively.
Govt’s CGT collection drops by half to Rs 6.44 billion in eight...
Institutional investors pay 10 percent CGT on profits earned from share transactions. However, the investment in mutual funds is not subject to any CGT. The government’s earning from CGT declines when there is a fall in turnover at the stock market.
The massive drop in share transactions led to the heavy fall in the CGT collection in the review year. In the past two consecutive months, the revenue collections were recorded at mere Rs 431.8 million and Rs 806.8 million, respectively, under the heading.
In the first month of the last FY, the government collected CGT worth Rs 2.15 billion, when the NEPSE index crossed 3,002 points. The amount, however, declined successively in the following months due to the impact of the Gen Z movement. CGT collection fell as low as Rs 243.65 million in one month between mid-September and mid-October.
In the next eight months, the market index fell to 2,812.34 points. The secondary market started to show some positive response after the successful conduction of the March 5 election, however only for a short period.
According to the NEPSE, the benchmark index dropped by 196.98 points (7.05 percent) in the fiscal year 2025/26, falling from 2,794.78 to 2,597.80 points. During this one-year period, investors lost a total of Rs 327 billion as market capitalization shrank from Rs 4.790 trillion down to Rs 4.463 trillion.
