In a major push to stimulate the sluggish domestic economy and restore investor confidence, the Ministry of Finance has officially released its 21-point “Capital Market Strengthening and Revival Action Plan, 2083”. The targeted reform package arrives amid market volatility caused by broader economic slowdowns and recent infrastructure damages from the Bhotekoshi river floods.
A cornerstone of the new policy is a significant revision to the capital gains tax (CGT) structure designed to encourage long-term investment. Under the updated provisions, individual investors holding shares for over 365 days will see their CGT reduced to 3.75 percent (down from 5 percent), while short-term holdings of 365 days or under will be taxed at 5 percent (down from 7.5 percent). The action plan also allows investors to adjust trading losses against overall profits within the same fiscal year so that tax is levied only on net earnings.
Beyond tax incentives, the plan introduces comprehensive market modernization measures. Amendments to the Securities Act will introduce legal frameworks for intraday trading, short selling, stock borrowing/lending, and full-scale broker-led margin lending by late 2026. Additionally, legal revisions under the Foreign Investment and Technology Transfer Act (FITTA) are slated to officially open Nepal’s secondary stock market to Non-Resident Nepalis (NRNs). The plan further directs SEBON and Nepal Rastra Bank to launch a new market benchmark index, revise bank investment risk weights, and issue guidelines for specialized bonds like green and disaster relief instruments.