Shrawan Brings Rs 62.5 Crore in Capital Gains Tax to Government

Government tax revenue collected from the stock market experienced a massive drop during the month of Shrawan, the first month of the fiscal year 2083/84. Total tax collected from profit on share sales (Capital Gain Tax) dropped significantly compared to the same period last year, falling by 245 percent to just NPR 624.96 million (Rs 62.49 crore). In contrast, the government had collected NPR 2.15 billion (Rs 2.15 arba) during the same month last year.

According to official figures, the largest portion of the tax collected in Shrawan came from short term individual investors, who contributed over NPR 357.1 million. Long term individual investors provided around NPR 193.5 million, while corporate investors accounted for nearly NPR 74.27 million.

This sharp decline in revenue comes despite a recent tax rate increase of 2.5 percentage points introduced in this year's budget by Finance Minister Dr. Swarnim Wagle, raising rates to 7.5 percent and 10 percent. Market analysts suggest that higher taxes combined with recent government policies have weakened investor confidence, leading to a major drop in daily trading volume, which currently struggles to hit NPR 4 billion turnover, today the turnover recorded only 3.29 Billion.