Stock trade levy revived

Sri 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.