Nepal's Capital Gains Tax Collection Halves to Rs 1.25 Billion in Two Months
Nepal's capital gains tax revenue fell 54.42% to Rs 1.25 billion in the first two months of FY 2025/26, driven by a sharp decline in secondary market share transactions. The government has responded by reducing CGT rates to revive investor confidence.
KATHMANDU, Sept 21 — Government revenue from capital gains tax (CGT) stood at Rs 1.25 billion in the first two months of the current Fiscal Year (FY), down by 54.42 percent compared to the amount generated in the same period of the last FY.
The decline in CGT collection has been attributed to the heavy decline in share transactions in the secondary market. During mid-July and mid-September of FY 2025/26, the government received Rs 2.75 billion in CGT.
According to the CDS and Clearing, the CGT collection was recorded at Rs 632.74 million in the last month alone. The figure, however, was Rs 7.78 million more compared to the amount worth Rs 624.96 million collected in the previous month.
Amid the persisting low confidence of investors, the share market transaction plunged to as low as Rs 2.5 billion a day. After the government raised the CGT rate through the budget for the current FY, the performance turned pathetic during the review period.
Following a continuous market decline, the government last week reduced the CGT rates on share transactions. Currently, a tax of 3.5 percent applies to profits from the sale of shares held for one year, while a 5 percent tax applies to profits from shares held for more than one year.