Fiscal Nepal
First Business News Portal in English from Nepal
Land ownership local level
KATHMANDU – The Government of Nepal has increased the capital gains tax on stock market transactions, raising the tax burden on profits earned from share trading based on the holding period of investments.
Presenting the national budget for fiscal year 2083/84, Finance Minister Dr. Swarnim Wagle announced a revised tax structure for capital gains in the securities market.
Under the new arrangement, investors selling shares within one year of purchase will now have to pay a 10 percent capital gains tax, up from the previous rate of 7.5 percent.
This marks a significant increase in taxation on short-term trading activity in Nepal’s capital market.
The government has also revised the tax rate for long-term investors. Those holding shares for more than one year, who previously paid a 5 percent capital gains tax, will now be required to pay 7.5 percent starting from the upcoming fiscal year.
Despite the increase in rates, the government has declared that capital gains tax on listed securities will now be treated as final tax, meaning no additional tax liabilities will apply on such transactions.
Market participants say this clarification removes long-standing uncertainty among investors regarding potential double taxation.
According to stock market stakeholders, the clarity on “final tax” status may offset concerns arising from the rate hike.
“We had been requesting the government to make capital gains tax final even if rates were increased,” said Sagar Dhakal, President of the Stock Brokers Association of Nepal. “Now that the government has increased the tax but also declared it final, it is likely to have a positive impact on the market.”
Analysts believe the revised structure could initially impact short-term trading sentiment but may improve long-term stability and investor confidence due to greater tax certainty.
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