Capital Gains Tax Collection Falls Sharply During Review Period

Government revenue from capital gains tax (CGT) on share transactions has dropped sharply in the first eight months of the current fiscal year, reflecting a slowdown in stock market activity.

The government has collected CGT amounting to Rs 6.44 billion during the review period, marking a sharp decline compared to Rs 12.16 billion collected in the same period last fiscal year, according to CDS and Clearing Limited.

The significant drop is attributed to a slowdown in share market transactions. Under current provisions, short-term investors are taxed at 7.5 percent on profits, while long-term investors have to pay 5 percent. Institutional investors are subject to a 10 percent CGT on profits earned from share transactions, whereas investments in mutual funds remain exempt from CGT.