CGT on share sales declared final, Investors’ longstanding demand addressed

KATHMANDU – The Government of Nepal has announced that the capital gains tax imposed on the sale of listed company shares will now be treated as final, addressing a long-standing demand from capital market investors.

Presenting the national budget for the fiscal year 2083/84 in a joint session of the Federal Parliament on Friday, Finance Minister Dr. Swarnim Wagle confirmed the new arrangement, stating that the capital gains tax on securities transactions will no longer be subject to additional taxation layers.

“I have made arrangements so that the capital gains tax levied on the sale of securities of listed companies will be final,” Minister Wagle said during his budget speech.

The decision is being seen as a significant policy shift aimed at simplifying the tax structure in Nepal’s capital market and improving investor confidence. Until now, uncertainty over whether capital gains tax was final or subject to further adjustments had been a recurring concern among market participants.

According to officials and market stakeholders, the issue had been repeatedly raised with previous finance ministers. About 15 days prior to the budget announcement, a delegation of stock market investors met Finance Minister Wagle and formally requested that the capital gains tax be declared final. The minister had reportedly assured them that their concerns would be addressed in the upcoming budget.

The announcement has been widely welcomed by market participants, who believe the reform will remove ambiguity in tax treatment and provide a clearer framework for investment decisions.

Sagar Dhakal, President of the Nepal Stock Brokers Association, said the new provision resolves a long-standing dispute in the capital market and provides much-needed clarity to investors.

“We had requested several previous finance ministers to implement this provision. This time, the Finance Minister has prioritized the capital market and addressed our concerns,” Dhakal said. “This will make the market more active and dynamic.”

Market analysts also suggest that the move could enhance participation in the secondary market by improving predictability in post-tax returns, which is a key factor influencing investor sentiment in emerging markets like Nepal.

The reform is also expected to reduce compliance complexity for individual investors and institutional participants, as capital gains from listed securities will now be settled under a single final taxation mechanism rather than being subject to further adjustments.

The development comes at a time when Nepal’s capital market has been seeking policy stability and regulatory clarity to attract both domestic and diaspora investment. Analysts say that consistent fiscal policy signals are crucial for sustaining long-term market growth and liquidity.

With the new arrangement embedded in the fiscal framework for 2083/84, stakeholders expect implementation guidelines to be issued soon by relevant regulatory authorities, including the securities market regulator and tax administration bodies.