Investors in Nepal recently held a meeting with Prime Minister Pushpa Kamal Dahal to voice their concerns and emphasize the importance of expediting the broker license issuance for the new stock exchange. Their primary goal is to ensure that the necessary work is completed swiftly, allowing for the smooth operation of the stock market. In addition to this, they have put forward several other requests, including the reinstatement of the share loan limit, reduction of the loan risk burden, and the implementation of a revised capital gains tax structure to encourage investment.
One of the key demands made by investors is the return of the share loan limit, which was set at 120 million rupees. This reinstatement would alleviate the burden of loan risks faced by investors, instilling greater confidence in the market. Moreover, investors propose that the loan risk burden should be reduced to 100 percent, providing further protection and stability for market participants.
Another significant request put forth by investors is the revision of capital gains tax rates. They advocate for a tiered structure, with short-term investors subject to a 5 percent tax rate, while long-term investors would be subject to a reduced rate of 3 percent. The rationale behind this proposal is to encourage long-term investment strategies and mitigate the impact of high-interest rates, which have been discouraging investors. Furthermore, investors believe that these tax rates should be reviewed with the ultimate goal of reducing them to a single-digit percentage, fostering a more favorable investment climate.
The Securities Board of Nepal (SEBON) had previously initiated the license process for new brokers, stock exchanges, and commodity exchanges, aiming to enhance the country's securities market. However, investors allege that the Prime Minister intervened, halting the stock exchange license process and attempting to interfere with the broker license process due to pressure from certain interest groups.
During the stock exchange license process, three prominent companies—Himalayan Stock Exchange, National Stock Exchange, and Annapurna Stock Exchange—submitted their applications, garnering participation from various business groups in Nepal. The investors assert that the evaluation of the business plans submitted by these companies had already commenced, with scores being assigned, when the Prime Minister ordered the license process to be halted.
Investors in Nepal are urging the government, particularly Prime Minister Pushpa Kamal Dahal, to take swift action in addressing their demands. By expediting the broker license process for the new stock exchange, reinstating the share loan limit, reducing the loan risk burden, and revising capital gains tax rates, the government can promote a thriving investment environment and reinvigorate the securities market. It is essential for the government to heed these requests and ensure transparency and fairness in the licensing process, thereby restoring investor confidence and bolstering the country's economic growth.