As demanded by the Department of Revenue Investigation (DRI), Nepal Stock Exchange (NEPSE) – the country’s sole secondary market – has submitted the names of 300 individuals and companies whose share transactions exceeded Rs 5 million.
DRI had recently requested NEPSE to send the name of individuals and companies making share transactions of more than Rs 5 million for the purpose of the Voluntary Disclosure of Income Scheme (VDIS) announced in the current fiscal-year budget to shore up revenue collection.
“We have also sent letters to some of the companies and individuals whose transactions crossed Rs 5 million, requesting them to disclose their sources of income,” said the source. According to sources, around 1,000 companies and individuals have invested more than Rs 54 million in the share market.
The government move comes amid continued fall in the NEPSE index due to eroding investor confidence in the share market following an increase in the capital gain tax for individuals from 10 percent to 15 percent of income.
The NEPSE index—the barometer of share transactions— nosedived to 728 points on Wednesday after touching a peak of 1175 points in the first week of September.
“It has created panic among share investors and the latest measure will further weaken the share market in coming days,” said an investor who did not want to be named.
The share market could not make any gain even though the government fixed a base price for bonus shares and rights shares in a bid to boost the sliding market.
“With its fresh move the government appears to have backtracked on free market economy,” added the source.
The government has already made it mandatory to disclose income sources for the purchase of vehicles, land and houses worth Rs 1.5 million, Rs 3 million and Rs 5 million or more respectively to bring the real estate sector within the regulatory framework.
prabhakar@myrepublica.com
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