Kathmandu. After the federal budget for the upcoming fiscal year 2080/81 introduced some policies that will affect the stock market, it has had a negative impact on the market. According to the budget, the companies that previously issued right shares at a premium price and increased their profits by giving cheap prices to weak institutions during the merger have to file taxes according to the old calculation.

This will affect the financial statements of many organizations. It has been seen that the dividend capacity of some companies that earn little profit and distribute low dividends may drop to zero. In the past, the practice of issuing IPOs and FPOs at premium prices increased after getting the facility of not paying income tax. Following this 'interpretation' of the Internal Revenue Department, after getting income tax exemption, efforts to bring FPOs at high prices by extracting profits in many ways started to increase.

But the new bill says that if any company has not paid income tax by distributing bonus shares in this way before, it has to pay all the taxes. After saying that if the tax is paid by the middle of November, the fee and interest will be waived, the situation has come to be that a large amount has to be paid in the corporate income tax.

Due to this, companies like Nepal Life Insurance, Shikhar Insurance, Standard Chartered Bank, NMB Bank, Nepal SBI Bank, Nepal Investment Mega Bank, which previously brought FPO at a premium price, have to pay a large amount of tax till November.

Apart from this, it is said that tax will be charged on the bargain purchase gain during the merger or acquisition. When two or more companies merge or acquire each other, the companies used to show this kind of income by giving a lower swap ratio to the weaker company.

For example, there is a land worth 20 lakhs, but if another company buys that land for 17 lakhs, the value of the land will be added to 20 lakhs. After the money paid is 17 lakhs, the buying company shows a profit of 3 lakh rupees and distributes a dividend equal to that amount. So far, no tax has been charged on the amount of profit. Therefore, organizations including Global IME increased their business size by merging and acquiring many weak organizations.

But this arrangement will now impose tax on those who make profit by killing other companies at a cheaper price than the real price. That too, big banks are panicking after all previous mergers and acquisitions transactions will be taxed.

IA natural person deals in securities, land or real estate as a regular business, then the provision of income statement and tax filing of such transactions has been brought forward. Considering the financial year 2076/77 as the base year, income tax has to be paid in this type of business since then.

Now those who have earned millions and crores by regular share trading have to pay tax on the income from trading since 2076. This can affect a large number of investors.

In the real estate business, apart from buying and selling themselves, those who play the role of mediators have earned a lot. It is not clear how this system binds them. But due to the fact that it appears that there is regular trading in the stock market and that there is a loss of profit in the trading, the fear of revenue will increase on anyone at any time. Investors are affected by such things.