Stock trade levy revived

cseSri Lanka’s bourse will re-impose a 0.3% share transaction levy it stopped in January, an exchange official said yesterday, after a proposal to tax capital gains met strong opposition amid a foreign outflow from the stock market.

Prime Minister Ranil Wickremesinghe last month proposed to impose capital gains tax for the first time since 1987 as the country faces a debt trap, partly due to infrastructure borrowing by the previous government.

Since the announcement, the bourse has seen about 3.8bn rupees ($26.22mn) in foreign outflows, bourse data showed.

“There will be 0.3% share transaction levy as it was until January,” Rajeeva Bandaranaike, chief executive of the Colombo Stock Exchange, said. The levy, which helped to raise 1.5bn rupees last year, would be re-imposed from Friday, he said.

Every buyer and seller will have to pay 0.3% on the turnover of their share-trading transactions, the bourse said in a statement. Stockbrokers and analysts expect investors to respond positively.
“Though there is a charge, it is better than capital gains tax,” said Dimantha Mathew, head of research, at a fund. (Reuters)

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