Government to reduce capital gains tax
Capital gains tax on those holding securities between five and eight years will fall from 28% to 22% and will fall to 11% for those who make gains on shares and bonds they have held for more than eight years.
According to ECO online, the Government is preparing changes to the tax regime for capital gains made on the stock market. The idea means that investors who have government savings bonds and company shares for a longer period of time (i.e., not speculative) will not have to pay such a high capital gains tax on their investments.
The changes that are being mulled by the Ministry of Finances will make a clear distinction between short-term capital gains and medium to long-term capital gains. The plan is to encourage people to view the capital markets as an instrument for long-term savings.
IRS capital gains tax on securities, debentures, stocks, shares and bonds currently stand at 28% when sold. However, stock market gains could soon be lower if tax payers subject to tax at source opt for capital gains aggregation.
There is also a new tax regime for crypto currencies on the cards, with the idea of not taxing medium and long terms capital gains at all, unlike short term investments. Those who make capital gains on crypto-assets held for less than 365 days will be taxed at 28%, but those who hold crypto assets for over 365 days will not have their capital gains taxed at all.