Time-line of The Rule 29 of Economic Bill, 2080 Controversy
Fri, Jun 2, 2023 9:41 AM on Latest,
The Inland Revenue Department (IRD) on Thursday evening published a notice in an attempt to further clarify the ongoing controversy with regard to the arrangements in the taxation system.
As per the press release, IRD stated that, it has been understood through several media outlets that the investors are still in limbo particularly with regard to Rule no 29 of the Economic Bill, 2080.
On Wednesday, in a joint press release, Nepal Investor Forum, Share Investor Federation and Nepal Capital Market Federation, had expressed their concerns, which has been acknowledged by IRD, as per the press release.
In the current press release, IRD mentions that only those who have been trading shares as natural persons as opposed to those have been doing so as regular business will be able to entertain the tax concession.
However, the criteria to distinguish between commercial traders and persons to be considered natural traders have not been describe or specified by IRD.
The earlier press release issued by the IRD had mentioned that only irregular/infrequent(पटके) share traders can entertain the said tax concessions as opposed to regular/frequent (नियमित) share traders.
Find IRD's second press release here:
Time-line of the controversy:
1. On Monday, Finance Minister Dr. Prakash Sharan Mahat in a joint session of the parliament announced the fiscal budget for the upcoming FY 2080-81. In his address, he notified of that if a Nepali citizen declares income from share or real estate trading from FY 2076/77 to 2078/79, until Chaitra, 2080, the 50 percent tax levied tax in accordance with Income Tax Act, 2058 will be waived.
READ MORE: Share Trading Income Requires Income Filing Despite Capital Gains Tax Payment
Read controversial Rule no 29 of the proposed Economic Bill, 2080:
2. On Wednesday, the investor associations argued 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. In a joint press release, Nepal Investor Forum, Share Investor Federation and Nepal Capital Market Federation, expressed their concerns. They had further warned that if their demand maintain Capital Gain Tax (CGT) as the final tax was not fulfilled, they would protest the decision.
READ MORE: Investor Associations Express Discontent over Tax Provisions in Next Financial Year's Budget
Find joint press release here:
3. Thereafter, the Inland Revenue Department (IRD) issued a press release stating that there have been no changes in the Income Tax Act 2058, in line with which CGT will be the final tax. However, the press release issued by the IRD had mentioned that only irregular/infrequent(पटके) share traders can entertain the said tax concessions as opposed to regular/frequent (नियमित) share traders.
This had caused confusion as to who can entertain the said tax concession of 50 per cent.
Find first press release here:
4. Thereafter on since Thursday afternoon, the dissenting representatives of the investor forums/associations had headed to brokerage offices to shut down the NEPSE TMS (Trading Management System). Prior to the development, they had also cordoned off the NEPSE office in the morning, warning to shut the TMS. The protesting investors had claimed they had already shut 10 broker houses for the day.
5. In the evening yesterday, IRD published a second press release, to further clarify the matter.
6. During the ongoing confusion, a panic was created in NEPSE as consequently the market had plunged 103 points only to have gained 16.54 points yesterday.
READ HERE: NEPSE Stands At 1,866.34 Level After Gain of 16.54 Points; Intraday Turnover Stood at Rs. 1.65 Arba
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