Kathmandu, August 4: Nepal Stock Exchange (NEPSE) last week declined by 6.08 points (0.48 percent) to close at 1,263.84 points due to the debate over the complexity of calculating the amount of capital gains enforced by the tax authority.
The market, which opened at Rs 1,269.92 points on Sunday, fell 17.11 points to close at Rs 1,252.81 points. On the successive three days transactions, the secondary market gained 3.18 points, 3.39 points, and 6.2 points respectively.
The market, however, dropped 1.74 points on Thursday, the next day the Ministry of Finance reached consensus with the investors’ association to resolve the problem appeared in the calculation of the capital gains.
Stock analysts said the existing problem of shortage of loanable funds with the banks and the persisting high-interest rate had failed to boost up the confidence of the investors even after the authority’s consent in the line of solving the problem of the capital gains.
The government through the budget slashed capital gains tax from 7.5 to 5 percent. But surprisingly, tax authorities asked the investors to self-declare the amount of capital gains by taking the weighted average of the shares they had purchased on different dates.
As per the new rule, investors have to take the sum of prices of all shares that they purchase at different prices and divide the total amount by the number of shares to get the cost price, which is deducted from the current share price of the particular company to estimate the amount of capital gains.
While implementing the new rule, stockbrokers had asked investors to be present at their office to settle capital gains tax. But the Finance Ministry on Wednesday eased the assessment process and allowed the investors to settle the tax via online.
The sensitive index that measures the performance of Group A companies also fell slightly by 0.94 points to close at 272.53 points, after the index of commercial banks slipped by double digits. The commercial banks hold major shares in market capitalization.
Last week, investors lost Rs 6.91 billion in the book value of their investment portfolio, after the market capitalization declined to Rs1, 574.28 billion from Rs 1,581.19 billion.
