Government announces major capital market and tax reforms in FY 2026/27 budget

KATHMANDU: The government has unveiled major policy reforms targeting the capital market and investors through the budget for fiscal year 2026/27.

Finance Minister Swarnim Wagle announced in the joint session of the Federal Parliament on Friday that capital gains tax (CGT) on the sale of listed securities will be treated as a final tax.

The move addresses a long-standing demand of stock market investors, aiming to simplify the taxation framework for capital market transactions.

The government also announced plans to revise legal and policy provisions to allow Non-Resident Nepalis (NRNs) to participate in the secondary securities market.

According to the budget statement, foreign investment approval processes, investment accounting systems, profit repatriation procedures, and capital gains tax regulations will be updated to align with current economic needs.

The personal income tax structure has also been revised, with lower tax rates for individuals earning up to Rs 1 million annually. The government has also announced a reduction in the top income tax rate from 39 percent to 29 percent.

In addition, the Nepal Stock Exchange (NEPSE) will be restructured, with the introduction of modern trading systems such as intraday trading and short selling.

The government said these reforms are expected to make the tax system more equitable, investment-friendly, and production-oriented, while boosting capital market expansion, attracting foreign investment, and strengthening private sector confidence.