October 29: The capital gains tax collected from investors in the securities market has increased by more than Rs 79.51 million in the month of Asoj (mid-September to mid-October) compared to a month ago. More than Rs 140.06 million were collected in mid-August to mid-September, but more than Rs 219.57 million were collected in mid-September to mid-October.

According to the information provided by Suresh Neupane, the information officer of CDS and Clearing Limited (CDSC), more than Rs 157.6 million were collected from short-term investors and more than Rs 61.9 million from long-term investors in the review month.

Looking at the data of CDSC, it seems that short-term investors have been more active in the secondary market in the last month as well. Brokers say that due to the lack of stability in market-related policy, investors are also active in booking profits in a short period of time. By mid-September, the securities market, NEPSE, stood at 1,964.91 points. In mid-October, the NEPSE was down to 1,864.62 points. Comparing the data of two months, NEPSE took a nosedive of 100.29 points. The income of the government increased despite the downfall of the secondary market.  Brokers estimate that investors who are active in short-term trading made profit in mid-October based on the dividends of listed companies.

The government collects tax by dividing the investors who deal in the secondary market of securities into two types in the case of individual investors. By dividing those who hold shares for more than 1 year as long-term investors and those who hold shares for less than that as short-term investors, the government collects capital gains tax of 7.5 percent for short-term investors and 5 percent for long-term investors. Institutional investors have to pay 10 percent capital gains tax. These investors have to pay capital gains tax based on the weighted average cost if they have made a profit from the securities business.

Stakeholders say that if the government's income can be increased along with the income of investors in the securities market, the confidence of the general public in the securities market will increase. The regulatory body of the capital market, SEBON, is currently working on the necessary legislation to increase institutional investors in the market.

The chairman of the board, Ramesh Kumar Hamal informed that in the coming days, work will be done to prepare the law to allow non-resident Nepali to enter the securities market as institutional investors. Hamal emphasized that for the sustainable development of the market, institutional investors should be brought forward as well.