Amid rising concerns among investors regarding a rumored one percent fee on share transactions, Member of Parliament Hari Dhakal has clarified that no such additional fee will be levied on regular secondary market transactions conducted through the Trade Management System and Nepal Stock Exchange platform.
Writing on his social media platform, the Rastriya Swatantra Party lawmaker assured investors that daily buying and selling of shares through the regular trading system remains completely free from this proposed fee.
The confusion arose after the draft of the new Company Act 2083 proposed a one percent share transfer fee on the transfer or purchase and sale of shares valued at twenty-five lakh rupees or above. According to the draft bill, any individual acquiring shares worth twenty-five lakh rupees or more must pay a one percent fee while registering the details of the share transfer. The draft also mentions that if the transaction occurs through the stock exchange system, the respective stockbroker must collect the fee and deposit it into the federal reserve fund.
Details of the Proposed Share Transfer Fee
MP Dhakal stepped in to clear the air, emphasizing that the ongoing debate about a one percent tax on all share transactions is based on a misunderstanding. He explained that stockbrokers will not collect any such one percent tax or fee during regular secondary market trading. The final tax for regular secondary market trading remains the standard Capital Gains Tax of seven point five percent or ten percent.
According to Dhakal, the proposed one percent fee is strictly designed for off-market transfers. This refers to specific types of direct ownership transfers, such as those involving inheritance, gifts, transfers after death, or large internal share restructurings within a company that are processed directly through the Central Depository Services and Clearing Limited.
Regular Trading Versus Off-Market Transfers
To make the distinction clearer for investors, Dhakal categorized the transactions into two types. For regular on-market trading conducted through the Trade Management System, investors will only pay the existing charges, which include broker commission, Securities Board of Nepal fees, depository participant fees, and capital gains tax. No new fees have been added to this process.
On the other hand, the proposed one percent fee is strictly applicable to off-market transactions of twenty-five lakh rupees or more. These transfers are executed directly through the depository system under specific government or regulatory guidelines rather than through daily market trading.
Dhakal urged investors not to panic over rumors and false narratives circulating in the market. He advised everyone to rely on official information and understand the actual facts before making investment decisions, emphasizing the importance of staying calm and trading with confidence.