Member of Parliament Hari Dhakal has clarified that the proposed 1% share transfer fee will not apply to regular secondary market transactions but only to specific off-market direct transfers.
Amidst ongoing discussions in the market about an additional 1% fee on share transactions, Rastriya Swatantra Party’s MP Hari Dhakal shared his views. He stated that this extra 1% charge will not apply to regular secondary market trading done through the TMS/NEPSE system.
He mentioned on social media, “TMS/NEPSE मार्फत दैनिक हुने नियमित सेयर किनबेचमा १% शुल्क लाग्दैन।” (The 1% fee does not apply to daily regular share buying and selling through TMS/NEPSE.)
Investor concern grow after it became public that the draft of the new Company Act 2083, which the government is preparing, proposed a 1% share transfer fee on the transfer or buying and selling of shares valued at Rs. 25 lakh or more. According to the draft, if shares worth Rs. 25 lakh or more are transferred or bought and sold, the person acquiring the shares must pay a 1% share transfer fee when recording the details. It also stated that if transactions occur through the securities exchange market system, the respective securities professional will collect this fee and deposit it into the federal consolidated fund.
MP Dhakal reiterated his stance via social media, confirming that the said fee will not be applicable to regular secondary market transactions.
Dhakal highlighted that for regular trading in the secondary market, only existing charges like broker commission, Nepal Securities Board fee, DP fee, and Capital Gains Tax will apply.
“Recently, there has been widespread debate about a ‘1% tax on share transactions’. But it is important to clearly understand one thing- brokers do not collect a 1% tax or fee when we trade shares in the secondary market through TMS/NEPSE. The final tax on secondary market transactions is still Capital Gains Tax (CGT) at 7.5% or 10%,” he wrote.
He explained that the 1% fee will only apply to off-market transfers, meaning specific types of direct transfers. “This provision applies only to direct transfers made through CDSC, such as gift deeds, transfers after death, and large internal company share transfers, as per the policies of the Securities Board or the Government of Nepal,” he wrote.
Here is his full post:
Some clear points about the 1% fee
And this is the truth and facts as we understand it!!
Recently, it has been observed that there is a widespread debate about “1% tax on share transactions”. But it is important to understand one thing clearly- when we trade shares in the secondary market through TMS/NEPSE, the broker does not take a 1% tax or fee. The final tax on trading in the secondary market is Capital Gains Tax (CGT) at 7.5% or 10%.
What everyone should understand about share transfer fees:
The 1% fee does not apply to daily regular share buying and selling through TMS/NEPSE.
The 1% fee is a provision that apply only to Off-Market Transfers of shares worth Rs. 25 lakh or more, which are specific types of direct transfers within a company.
Therefore, it is incorrect to say that investors who trade regularly through TMS must pay an additional 1% fee.
Regular Trading (On-Market):
Daily transactions through TMS will continue to have only broker commission, SEBON fee, DP fee, and Capital Gains Tax (CGT) as per the previous arrangement. No new 1% fee has been added to this.
Off-Market Trading:
This provision applies only to direct transfers through CDSC, such as gift deeds, transfers after death, and large internal share transfers within a company, according to the policies of the Securities Board or the Government of Nepal.
The current commotion regarding this matter has created unnecessary confusion and fear among investors. Let’s not follow rumors, but draw conclusions only after understanding the truth and reality based on official information.
Let’s trade with restraint and trust the facts.
This article was originally published on https://bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
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