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With the country’s stock market going through a bearish run throughout the last fiscal year, the government income from stock trading has taken a huge beating. The capital gains tax (CGT) from stock trading plunged by a whopping 71.3 percent in FY 2022/23. 

In fact, CGT collection has declined for the second straight year. After collecting a record-high capital gains tax in FY 2020/21, the government income from stock trading has been on the decline in the last two fiscal years. 

According to the CDS and Clearing Limited (CDSC) which keeps the consolidated data of the revenue from the stock market, the government collected only Rs 2.97bn as capital gains tax in FY 2022/23. The CGT in FY 2021/22 stood at Rs 10.35bn. The capital gains tax collection from the stock market had reached an all-time high of Rs 14.13bn in FY 2020/21. 

With the stock market on a bull run, tax collection from the capital market had surged exponentially in FY 2020/21. The domestic bourse has taken a huge surge from last year July when lockdown was imposed to contain the first wave of the Covid-19 pandemic. The digitization of the capital market which allows investors to conduct stock trading from their homes also helped new investors to enter the capital market.

In FY 2022/23, the government collected CGT totaling Rs 1.32bn from long-term share trading and Rs 1.64bn from short-term share trading.

Stock analysts attribute multiple factors to the decline in CGT collection in the last two years. In FY 2021/22, the CGT fell by around 27 percent mainly due to the government’s decision to raise the taxes from the stock trading. The government had imposed a five percent CGT on income from long-term trading of shares (shares that are sold after a year of purchase) and a 7.5 percent CGT on short-term trading (shares that are sold in less than a year of purchase) in FY 2021/22. 

In addition to this, the Nepal Rastra Bank (NRB)’s decision to tighten the margin lending through the Rs 120m cap and to increase the risk-weighted average to 150 percent on margin loans also led to a downfall in the stock market in the last two years. This, along with the extended bearish run in the stock market in FY 2022/23 contributed to a decline in share trading as well as turnover in the Nepal Stock Exchange (Nepse). 

The capital gains tax received by the government mainly depends on two things—the share prices of the companies listed in Nepse and their turnover. If the share price of the company increases, the investors earn profits, as a result, the CGT received by the government also increases. Similarly, when the number of transactions is higher, tax collection is likely to increase. However, in the last fiscal year, the number of share transactions has decreased along with the stock market indicators. “The CGT collection declined in the last fiscal year as overall stock market trading went through a bearish run,” said Suresh Neupane, Spokesperson of the CDSC.

Income from share trading

The ruling coalition has agreed on ministerial allocations in Koshi Province.

In the first phase, an agreement has been reached on who to appoint as the minister from which party.

Following the agreement, the sworn-in ceremony of the Chief Minister, which was canceled this morning, is scheduled to be held at 5 pm today.

After the ruling coalition meeting, it was agreed to give the Economic Affairs and Planning Ministry to the CPN (Maoist Center) and the Ministry of Physical Infrastructure to the CPN (Unified Socialist).

According to the agreement, Baburam Gautam, who had resigned as the Speaker, will be appointed as the Minister for Economic Affairs and Planning.

It has been agreed upon that the Maoist will join the government under his leadership.

Kamal Prasad Jabegu will be appointed as the Minister for Physical Infrastructure.

Preparations are underway to give the responsibility of the Ministry of Social Development to Pradeep Sunuwar of the Nepali Congress.

More appointments will be made after the government takes the vote of confidence.

Province Chief Parshuram Khapung appointed Uddav Thapa as the Chief Minister as per Article 168 (2) of the Constitution.

Global Compact Nepal (GCN) collaborated with three of its member companies, namely Daraz, Leaf Plus, and Himalayan Everest Insurance, to jointly organize the fourth session of Peer Learning Groups (PLG) at Daraz headquarters. The event brought together private sector companies from Nepal, providing them with a platform to learn about the latest best practices in Climate Action through company-led sessions.

Global Compact Nepal operates as the local network of the United Nations Global Compact (UNGC), which is a voluntary non-binding pact aiming to encourage businesses worldwide to adopt sustainable and socially responsible policies while reporting on their implementation. More than 50 companies in Nepal are part of this global corporate sustainability initiative and actively engage with the organization to enhance their understanding of sustainability through participating in events.

Peer Learning Groups constitute one of the many activities organized by Global Compact Nepal to promote sustainability among private sector companies. This year, 25 Global Compact Local Networks worldwide offer such groups, providing a safe space for companies to share their efforts and challenges regarding critical sustainability issues with like-minded professionals. For Nepalese private sector companies, it presents an ideal opportunity to connect with local peers, share insights, and gain knowledge on Climate Action through six sessions held over six months. Prior to this fourth session, three other sessions witnessed companies like Nebico, Hoste Hainse, IUCN, Ingrails, and Smart Paani sharing their sustainability initiatives for the benefit of others.

During the fourth session, Daraz, a well-established and reliable marketplace with over five years of service, explained how they are actively pursuing sustainability. Mr. Raunak Thapa, Operations Support Manager at Daraz, shared their commitment to reduce their environmental impact by minimizing paper usage, recycling plastic packaging, increasing the use of electric vehicles for delivery, and implementing solar panels for energy.

Himalayan Everest Insurance also showcased commendable sustainability efforts, highlighting their digitalization of insurance application procedures to significantly reduce paper consumption. Through a recent initiative in partnership with Ncell, they simplified the insurance process for the public, enabling claims through a single touch on their mobile phones, demonstrating their dedication to providing an eco-friendly insurance experience for customers.

Leaf Plus, another company featured in the session, operates as a socio-economic enterprise focused on making a positive impact on the environment and society by producing and promoting Areca (Supari) Leaf products, involving women, marginalized, and farmer groups in the production chain. Their innovative use of naturally fallen leaves as a sustainable and responsible alternative to plastics reflects their commitment to environmental conservation.

The success of the four PLGs reflects the increasing awareness among Nepalese companies about sustainable business practices. Two more sessions of Peer Learning Groups are scheduled for the coming months. By fostering such collaborations and knowledge-sharing, the private sector in Nepal takes significant steps towards creating a more sustainable and responsible business environment.

CPN (Maoist Center) Chairman Pushpa Kamal expressed his grievances that the party has not been like a party.

Presiding over the fourth Central Committee meeting of the party that kicked off from today, Dahal, who is also the Prime Minister, urged the cadres to work responsibly on party building.

“There is a huge committee of leaders and cadres in the party organization. But the party has not been like a party,” he said, adding, “A campaign to reunite the communist parties should be started from this meeting. I believe that the Central Committee members will discuss the issues in a serious, responsible and constructive manner.”

He expressed his belief that the meeting will address the needs of the entire country and people.

“We are starting a new process to unite the party. The meeting will not only address the party and protests, but also the needs of the entire country,” he said.

Prime Minister Dahal claimed that hope has once again emerged for the people after the formation of government under the CPN (Maoist Center).

CPN (Maoist Center) Deputy General Secretary Janardan Sharma said that there is no need of a high-level committee to investigate the latest gold smuggling case.

He made such remarks at a time when another Deputy General Secretary of the party Barsha Man Pun had been demanding the formation of a high-level committee to probe the case.

Sharma said that there is no need of a high-level committee to investigate the gold smuggling case while he was on his way to the Kamaladi-based Nepal Academy Hall to take part in the Central Committee meeting scheduled to start from today.

“The Department of Revenue Investigation is investigating the case. Why do we need the high-level committee?” he questioned.

Sharma also urged the main opposition CPN-UML to help in the investigation of the gold smuggling case.

The UML has been obstructing Parliament proceedings for the past few days demanding the formation of a high-level probe committee.

The youth leaders of the ruling coalition have also been saying lately that it would be better to form a high-level probe committee to investigate the gold smuggling.

Home Minister Narayan Kaji Shrestha has not given any response in the Parliament on the gold smuggling scam.

The Department of Revenue Investigation on June 18 seized around one quintal gold that had passed the airport customs undetected.

So far, 18 persons have been arrested in connection with the case.

The CPN (Maoist Center) has decided to expand its Central Committee.

A Standing Committee meeting held on Wednesday before the Central Committee meeting decided to expand the Central Committee by amending the statute to ensure inclusiveness.

Currently, there are 387 members in the Central Committee of the Maoist.

The Maoist Center is preparing to make 22 women members as central members.

Speaking to journalists after the meeting, party spokesperson Krishna Bahadur Mahara said that the party is preparing to bring some women, youths and left out senior leaders to the Central Committee.

In the Central Committee meeting, party Chairman Pushpa Kamal Dahal will present a political report by briefing on the recent political situation, Mahara said.

The members will get time to air their views after the party Chairman presents the political report, he said.

The five-day Central Committee meeting of the Maoist Center is starting from Wednesday in Kathmandu

The price of gold has dropped by Rs 600 per tola in the domestic market on Wednesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow metal is being traded at Rs 112, 400 per tola today. It was traded at Rs 113, 000 per tola on Tuesday.

Meanwhile, tejabi gold is being traded at Rs 111, 850 per tola. It was traded at Rs 112, 450.

Similarly, the silver is being traded at Rs 1,460 per tola today.

The CPN (Maoist Center) has decided not to live-stream the Central Committee meeting slated for August 2-6.

An office bearers meeting of the Maoist Center held on Wednesday before the Central Committee meeting decided not to live-stream the meeting, Central Office Secretary Dor Prasad Upadhyay said.,

Earlier, the party had decided to broadcast their Central Committee meeting online with an objective of directly providing a glimpse of the meeting's proceedings to the general public and party cadres.

After most of the leaders expressed their dissatisfaction over the party’s decision to live-stream the Central Committee meeting, which is considered an important meeting, an office bearers meeting held this morning decided not to stream the meeting live.