Government eliminates stock dividend tax of Manufacturing & Hotels; Companies like Unilever, Taragaon, Bottlers Nepal & Soaltee encouraged to distribute bonus shares

The budget unveiled for FY 2075/76 has abolished dividend distribution tax for manufacturing and tourism sector companies. Now, companies that reinvest their accrued profit (i.e. by providing bonus shares) will not have to pay tax. However, this provision is only limited to stock dividend and not cash dividend. Companies have been paying 5% tax for both bonus share and cash dividend. Likewise, the budget has also provided income tax benefits to the companies that directly employ more than 100 people.

This move has encouraged companies to distribute dividend as bonus share and this decision can attract investors in market, which can impart support against the ongoing bearish trend. The government has also decided to eradicate VAT for broker commission.

Following are the NEPSE listed manufacturing & tourism companies:

 Also See: Major Budget 2075/76 Announcements