Investor Associations Express Discontent over Tax Provisions in Next Financial Year's Budget

Investors in Nepal's stock market have recently voiced their dissatisfaction with certain tax-related provisions outlined in the budget for the upcoming financial year. In a joint press release, Nepal Investor Forum, Share Investor Federation and Nepal Capital Market Federation, expressed their concerns.

One particular point of contention raised by the investor associations is the special provision mentioned in the budget, which grants exemptions to individuals involved in securities, land, and real estate dealings. According to the investors, this provision contradicts the instructions provided by the Inland Revenue Department (IRD).

In a letter dated Ashad 05, 2077, the Department of Revenue informed the Securities Board of Nepal (SEBON) about the process of advance tax recovery on capital gains resulting from securities transactions. It stated that eligible individuals could obtain a tax payment certificate from the Internal Revenue Office or Taxpayer Service Office by filing through the electronic tax system.

However, the investor associations argue that, up until now, transactions conducted by individuals, as opposed to firms or companies, have not been considered as business activities and, as a result, have not been subject to tax return submissions.

This development has raised concerns among investors who fear that the proposed tax provisions may impose additional financial burdens and compliance requirements on individuals engaging in securities transactions. The investor associations are urging authorities to reconsider these provisions and engage in a dialogue with the investor community to address their concerns effectively.