Capital gains tax in this fiscal year (till the end of June) dropped to Rs 335 million compared to Rs 920 million recorded during fiscal year 2009/10. [break]
“The impact of slowdown in secondary market has been reflected in the collection of capital gains tax,” said Shankar Man Singh, general manager of Nepal Stock Exchange said.
Nepse index has continued to tumble this year and is currently hovering around 460 points, significantly down its peak of 1175.38 points recorded on August 31, 2008.
The government had lowered capital gains tax rate to 10 percent from 15 percent from the current fiscal year due to immense pressure from the investors.
Frequent margin lending calls and tightening in loan disbursement for share investment had sparked liquidity crunch in capital market, creating adverse climate for investment on new shares in the secondary market.
“High bank rates also discouraged investors to put their money in share market where the rate of return on investment is getting low,” said Nirmal Pradhan, an investor.
Daily transaction of shares in the secondary share markets has dropped to around Rs 30 million from over Rs 10 billion recorded when the investment climate in the country was encouraging.
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