The government has announced a range of policy measures targeting the development and modernisation of the country’s capital market through the fiscal year 2026/27 budget.
Presenting the budget at a joint session of the Federal Parliament on Friday, Finance Minister Dr. Swarnim Wagle said that capital gains tax on the sale of securities of listed companies will now be treated as a final tax, simplifying tax compliance for investors and ending years of uncertainty over whether such gains would be subject to additional personal income tax liabilities.
Meanwhile, the government has increased the capital gains tax rates. Investors holding listed securities for one year or less will now pay a 10% tax on gains, up from 7.5%, while the rate for long-term investors holding shares for more than a year has been raised to 7.5% from the previous 5%.
To attract greater investment from the Nepali diaspora, the government will amend legal provisions related to foreign investment approval, investment accounting, profit repatriation, and capital gains taxation, enabling Non-Resident Nepalis (NRNs) to participate in the secondary securities market.
The budget also includes plans to issue shares of Rastriya Jeevan Beema Company and Bishal Bazar Company to the general public. Likewise, the government will retain a 66% stake in Nepal Telecom while divesting the remaining shares to the public by the end of Poush 2083. Minister Wagle outlined a plan to use proceeds from the share sale to support the development of Nepal as a regional tech hub.
In a bid to accelerate investment in large infrastructure projects, private developers of large and reservoir-based hydropower projects will be permitted to sell up to 40% of shares to the public in the first year, provided they secure full investment commitments.
The government has also pledged to strengthen regulatory institutions and introduce technology-driven trading systems to make the capital market more investor-friendly. The Nepal Stock Exchange (NEPSE) will be restructured, with instruments such as intraday trading, short selling, and derivatives to be introduced in phases.
Additionally, listed Nepali companies will be allowed to issue Global Depository Receipts (GDRs), enabling them to seek listings in international securities markets.
The budget has adopted a zero-tolerance policy against market manipulation practices such as share cornering and insider trading. A separate bill governing securities market management, offenses, and penalties will also be tabled in Parliament.
The government further announced plans to encourage the conversion of unused privately owned agricultural land into shares of commercial agricultural companies to promote large-scale farming and productive land use.