Major highlights of Budget Speech 2076/77 to Investors: BFIs and capital market

May 30, 2019 | Investopaper

In spite of severe criticism by the economist, the budget of this year has received some positive comments from the investor’s side, as evident from the enthralling of investors with lowered capital gains tax, from 7.5% last year to 5% this year. This inclination of Dr. YubarajKhatiwoda, the current finance minister, has been seen in an optimistic light among the investors.

Below listed are some most important takeaways for an investor from the budget speech for the fiscal year.

  1.  The merger between the big banks and financial institutions to bring the synergy in the banking and financial sector was one of the anticipated topics that the budget speech would cover. Finance minister Yuvraj Khatiwada informed that the merger of big BFIs and insurance companies shall be promoted. Lately, the president of Banker’s association had been promoting the concept of big mergers. Although the budget hasn’t exempted the tax as requested by the Banker’s Association, banks and financial institutions undergoing merger would be exempted from the dividend tax for the time period of three years (currently, the dividend tax is only exempted for two years).
  2. PAN system shall be implemented in the share market for those performing transactions in large number and amount. Indeed, the government has already implemented a PAN system for investors with investment exceeding Rs. 5,00,000.
  3. One window policy regarding information for private sector investment will be implemented.
  4. SEBON and Nepse shall be upgraded.
  5. Non-residential Nepalese( NRN) will also be encouraged to participate in the capital market.
  6. The reinsurance policy will be changed.
  7. Addressing the derivative market, gold and silver of people can be deposited in banks and financial institutions.
  8. Similarly, national payment gateway shall be promoted.
  9. Capital gains tax, which had created a big fuss in the share market, will be reduced from 7.5% to 5%. Last year Dr. YubrajKhatiwoda had received severe criticism from the investors for hiking the CGT by 50%. This year, the finance minister has lifted the criticism with investor-friendly fiscal policy.
  10. Trustee Act shall be prepared.



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