Government decides to reduce capital gains tax on share transactions, what now for the stock market?
The government has decided to reduce the capital gains tax on share transactions. The Cabinet meeting set the tax at **3.5 percent** for long-term investments and **5 percent** for short-term investments. This is expected to restore investor morale and bring the market back on track.
Kathmandu. The government has decided to reduce the capital gains tax on the stock market. The Cabinet meeting held on Wednesday decided to reduce the capital gains tax levied on profits from share transactions.
Government spokesperson and Minister for Education and Sports Sasmit Pokharel said the decision was made to reduce the capital gains tax. While announcing the Cabinet decisions, Minister Pokharel informed that as per the 'Capital Market Strengthening and Revival Action Plan 2083' issued by the Ministry of Finance, a decision was made to reduce the capital gains tax on share transactions.
With this, now for natural persons, an advance tax of 3.5 percent must be paid on the profit amount of interests held for more than 365 days, and 5 percent on the profit amount of interests held for 365 days or less.
Previously, an advance tax of 7.5 percent was levied on the profit amount of interests held for more than 365 days, and 10 percent on profits for 365 days or less.
With this government decision, share investors have said that the lost morale has returned. Share analysts have said that the government's decision to reduce the capital gains tax on share transactions is welcome, and this decision has boosted morale for the stock market to return to its rhythm. They have expressed confidence that the market will now rise.