The government’s revenue collection from capital gains tax (CGT) fell sharply in the first month of the current Fiscal Year (FY) 2026/27, dropping to Rs 624.90 million.
According to CDS and Clearing, CGT revenue during the first month was only around one-fourth of the Rs 2.15 billion collected during the same period of FY 2025/26.
Stockbrokers attributed the sharp decline to a slowdown in share transactions amid low investor confidence in the stock market. Reduced trading activity has directly affected the government’s revenue from capital gains tax.
The decline comes amid continued weakness in Nepal’s stock market, where subdued investor sentiment has reduced trading volumes and the frequency of profitable share transactions.
Meanwhile, the government has increased the CGT rate on share transactions. The tax on capital gains has been raised from 5 percent to 7.5 percent for short-term investors, while the rate for long-term investors has increased from 7.5 percent to 10 percent.
The sharp fall in CGT revenue in the opening month of the fiscal year highlights the impact of weak stock market activity on government revenue. A sustained decline in trading volumes could further reduce CGT collections in the coming months.
