How might the upcoming budget affect capital market in Nepal?
Once the stability is achieved, capital market will certainly feel the heat. Positive effects will be realized then. What about the liquidity position in the market and how are the bankers enforcing the government to maintain CRR at an adequate level. Market is reasonably liquid for now and CRR is appropriate. However, Statutory Liquidity Ratio (SLR) should be imposed by the government in addition to CRR for protecting the banking system. This Statutory Liquidity Ratio is determined as percentage of total demand and percentage of time liabilities. Should Capital gain tax be decreased and replaced by Transaction tax instead? How can the upcoming budget help to restore the lost confidence in the market due to CGT increment last year? The Capital Gain Tax (CGT) should be there but at a reasonable rate, considering the depth of the market. Bit reduction in the CGT might accelerate the market as it is not investment friendly at present. Levying transaction tax seems extraneous as the market
