Bankers and Insurers Irk Economic Bill Rules 26, 27, and 29; Warn of Irreplaceable Economic Loss, Protests

In a joint press release issued by the Confederation of Banks and Financial Institutions, Nepal; Nepal Financial Institutions Association; Nepal Insurers' Association (NIA); Nepal Bankers' Association (NBA); Development Bankers Association Nepal (DBAN); and Jeevan Bimak Sangh Nepal, these organizations have expressed their dissatisfaction with Rules 26, 27, and 29 of the Economic Bill, 2080.

Earlier, on Jestha 15, Finance Minister Dr. Prakash Sharan Mahat presented the financial budget for the upcoming fiscal year 2080-81 in a joint session of both houses of the federal parliament. The budget was subsequently presented in the House of Representatives on Tuesday for approval as new legislation.

Rule 26 introduces new taxation on premium amounts from Follow-on/Further Public Offerings (FPOs), while Rule 27 states that income tax will be collected on gains obtained during merger and acquisition transactions.

Similarly, Rule 29 stipulates additional taxes on profits from share trading and real estate transactions, diverging from the current practice of establishing Capital Gain Tax (CGT) as the final tax. The rule provides certain concessions for natural persons earning income from trading shares and real estate, as opposed to those engaged in regular business activities.

The organizations have requested the government to immediately suspend the proposed taxation provisions specified in rules 26, 27, and 29. If their demands are not met, the organizations have warned of organizing protests.

See press-release here: 

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Time-line of The Rule 29 of Economic Bill, 2080 Controversy