KATHMANDU: Finance Minister Swarnim Wagle has said the budget provision designating capital gains tax on share transactions as a final tax is a settled decision and will not be revised.
Speaking to journalists at Singha Durbar on Sunday, Wagle said there had been attempts to create confusion over the provision despite it being introduced at the request of stakeholders.
“I have seen reports suggesting that what Wagle called final may not actually be final. It is final,” he said.
According to the minister, representatives of the investor community had repeatedly urged the government to end uncertainty surrounding capital gains taxation.
He said stakeholders had argued that even if tax rates were increased, it would be preferable to having ongoing uncertainty over future tax liabilities.
Wagle noted that some investors had pointed to neighboring India’s system of short-term and long-term capital gains taxes, saying they would be willing to accept higher rates if the government guaranteed certainty in the tax regime.
Responding to those concerns, the government decided to keep the rates relatively moderate, setting the final tax at 7.5 percent for transactions previously taxed at 5 percent and 10 percent for those previously taxed at 7.5 percent.
The finance minister said the government had taken a generous approach in finalizing the rates while addressing demands from market participants.
He also stated that despite the government’s efforts to clearly explain the policy, misunderstandings and misinformation had continued to circulate.
Wagle further said that income generated from the stock market can be properly disclosed and accounted for, particularly in cases involving multiple firms and companies.
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