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What is capital gain tax

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tax

There are many types of tax that a government imposes upon a taxpayer (an individual or other legal entity) in order to fund various public expenditures. Like for example, Income tax, property tax, sales tax, value added tax, etc. One of the types is capital gain tax. So what is capital gain tax? 

Suppose you bought a land in Rs. 1 lakh. After 3 years, the land price went up to 10 lakhs and you sold it. Here, you made 9 lakhs. That’s your capital gain and you gotta pay tax on that as per your country law.
 
That’s a simplest way of explaining capital gain tax, but it’s much complicated in business level, specially when business is quite complex.
 
Suppose you started a mobile app company investing 5 Lakhs. After certain years, Facebook comes and says, “hey you got an awesome app, we want to buy your company for 1 billion rupees,” and you sold it. Now, you gotta pay capital gain tax on 500000 – 1,000,000,000 which is Rs. 9,99,500,000 as per the taxation rate of your country. If it is 15%, you need to pay like 1,49,925,000 (One crore forty-nine lakhs twenty five thousands) to government.
 

 

That’s called capital gain tax.  Wikipedia definition says

capital gains tax (CGT) is a tax on capital gains, the profit realized on the sale of a non-inventory asset that was greater than the amount realized on the sale. The most common capital gains are realized from the sale of stocksbondsprecious metals, and property.  
In today’s world, business is more than just a balance sheet of a company. Your company may be earning nothing but your company value can be perceived as billion-dollar worth. Like for example, Whatsapp was sold in 1 billion though it was not making any money. Recently, Musically was sold in 1 billion. Even it was not making money. A brand name can worth a million, an idea can worth a million. You sell it and you are subject to capital gain tax.
 
There are countries like Singapore, Hong Kong, Switzerland which don’t have capital gain tax provision and there are countries like Nepal which have. Again different countries have different rates, different clauses, different slabs, different exemption.
 
Lesser complication, better investment, more entrepreneurs, more innovation.

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Knowledge & Infos

Citizenship Act: What’s the issue

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Many from Nepal seem quite confused when it comes to the debate on citizenship provision in New Constitution and I reckon that’s because the constitution came in rush without much of discourse and debates and lot other factors like nationalist rhetoric.  So here is my attempt to explain everything in very simplistic way.

What constitution has said about citizenship

There are two kinds of citizenship:

  1.  Citizenship by descent.
  2.   Naturalized citizenship

What’s the difference

Citizenship by descent is quite superior to naturalized citizenship in sense, in order for a person to be elected, nominated or appointed to the office of President, Vice-President, Prime Minister, Chief Justice, Speaker of the House of Representatives, Chief of State, Chief Minister, Speaker of a State Assembly, and chief of a security body, the person must have obtained the citizenship of Nepal by descent.

Which basically means if you have naturalized citizenship, you can never become President or Prime Minister or Chief Justice or anything mentioned above. Naturalized citizenship is basically designed for people who would like to obtain Nepali citizenship though didn’t have ancestral root in Nepal.

Ya, in a way, it makes sense for not letting naturalized citizen to become president of Nepal or Prime Minister of Nepal.  Up to here, no issue.

So what’s the issue

This is the most complex part.  So let’s go slow from here.

Neha and Raj are siblings.  They both got married and both have children from their respective partners.  As their children reached 18, they both went to get citizenship by descent for their children.

Neha’s child can get citizenship by descent if:

Clause a.  Her husband holds Nepali citizenship.
Clause b.  Her child was born in Nepal.
Clause c.  Father of her child is not traceable.

Which means, Neha’s child can never get citizenship by descent even though she herself is citizen by descent if:
1.  Her husband is a foreigner.
2.  Her child was born outside Nepal.
3.  She didn’t want to lie or hide father’s identity.

So, Neha must prove that either her husband is Nepali, or her child was born in Nepal, or she should simply lie that she does not know where the father of her child is.  If she fails to provide any, her child will only get naturalized citizenship which means her child can never ever become president or prime minister of Nepal.

Whereas, Raj’s child can get citizenship by descent without any clause.

Can you see the difference??

 

 

Do we ask the same question to a man? “if he is married to a foreigner, he should get citizenship for his child from his wife’s country.  Why Nepal?”

We don’t.  Why? Because we are culturally wired in patriarchy.

Sufferers of this constitutional provision will not be Nepali girls marrying Nepali guys.  Sufferers will be the following:

  1.  A Nepali girl married to a foreign guy and got abandoned later with a child.
  2.  A Nepali girl, who while working abroad, got impregnated through exploitation.
  3.  A Nepali girl, who wants her child to be remained as Nepali though married to a foreigner.
  4.  A couple (Nepali woman and foreign man) who wants to settle in Nepal and helps their children grow and reach to their full potential as freely and openly as any Nepalese couple by descent.

This will not be a case if is a Nepali man.  If his wife (foreigner) abandons him, his child can still get citizenship by descent.  If he wants his child to remain as Nepali though married to a foreigner, he can make that happen.  If he wants to settle in Nepal with his foreign gf/wife , he can and still help his children grow and dream to their full potential as freely and openly as any Nepalese couple by descent.

Another issue is, 

There is a provision though that will let child from such women get citizenship by descent.  All she has to do is lie and tell “I don’t know where the father is.

11.5  A person who is born in Nepal from a woman who is a citizen of Nepal and has resided in Nepal and whose father is not traced shall be provided with the citizenship of Nepal by descent.

How awful, sad, frustrating, and sick can a constitutional clause be that is designed to work as loophole, to encourage contempt, practice lies, and make someone feel terrible??  Why can’t her child be given that goddamn citizenship by descent without too much drama and questioning??

There are thousands of Nepali women married to Indian men.  Now what?? we give citizenship by descent to all those children?? No way!!

Boom! Nationalist rhetoric.

Why can’t we set uniform criteria for both male and female? Maybe something like, a child, whose father or mother is of foreign nationality, must have stayed in Nepal for X number of years to qualify for citizenship by descent.  That would be win win for all.

To sum it up,

A brother gets married to an American girl. A sister gets married to a Korean guy. They both have babies from their respective partners. After some years, they got divorced.

Brother comes back to Nepal with his child and sister with her child.

18 years passed since then.  Child from both have grown up.  Time to get the citizenship.  Brother’s child gets citizenship by descent and sister’s child gets naturalized citizenship.  One can dream to become president of Nepal or Prime minister, and another’s can’t….just because she is not man.

That’s discrimination.  Please don’t justify it showing people from other side of borders.

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Knowledge & Infos

Why freedom of expression matters and its limitations

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According to the Universal Declaration of Human Rights, freedom of expression is the right of every individual to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers. 

Freedom of expression is a wild game. At first, it all looks mess — everyone talking garbage. After sometime, garbage will get into a logical argument. Then, slowly logics will start replacing illogical voices.  Within these logical ones, more logical arguments will happen. Finally, it will hit the limit of logic.

There happens the birth of refined views, backed by logic, rationality, references, proofs, and that will be widely accepted — a birth of collective wisdom.
 
You see? In free society, you need a patience to enjoy the benefits. Humans are very capable to self govern through their own intelligence and reasoning. Government doesn’t need to tell how they should think and analyse like as if only they know and rests are only non-humans, incapable of thinking and reasoning.
 
In a society, where there is no as such freedom of expression, there is a limitation to such discourse. Only handful of people are allowed to come up with their own ideas and views that they think right and try to impose on rest. Rest of the people are forced to sip up the views imposed on them. This culture will dwarf innovation and creativity.  Like back in stone age, where priests and kings would come up with the ideas, and rests are to followed them word-by-word without questioning  and reasoning.
 
Of course, freedom of expression has its own downside. Some may misuse the right to express their psychopathic tendencies and ill intentions. That is why to balance this, there is another side of the coin, that’s called no-harm principle, which basically means, like any freedom, freedom of expression goes by a rule that while exercising your freedom, it should not harm others, individuals or groups.  So, freedom of expression should not be with an intention to ignite violence, hate, obscenity, bullying, etc.  This is where we need government — to make sure that while someone exercising his/her right to freedom of expression, s/he is not harming anyone intentionally to a level that it challenges other fundamental rights of the victims.  That’s why there are few laws to protect victims, like defamation law.

So, to rightly understand freedom of expression, understand that freedom of speech and expression have common limitations or boundaries relate to libel, slander, obscenity, sedition, incitement, classified information, copyright violation, right to privacy perjury, etc.  As long as your freedom of expression does not fall under those things, you are all set to go exercise the right.

You know what does that mean?

It means, you are given rights and freedom so that you can prevent harm to others, so that you can utilise your liberty for your personal happiness which shall eventually benefit society/community.  You are not given rights and freedom, many didn’t die for your rights and freedom, to grant you a power to harm others.

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Knowledge & Infos

Information Technology Bill: All that you need to know

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The bill includes detailed provisions on legal recognition of electronic records, electronic signature, protection and confidentiality of information, domain registration and management, public e-service, digital signature, provisions related to social media, information technology court, national information technology centre.

On Thursday, government tabled Information Technology Bill in the House of Representatives causing yet another outrage among people. Some provisions of the bill have created fear and suspicion among people. Critics are worried about possible abuse of this law by government and its authorities to deliberately incapacitate free speech of people.

What is this Bill about?

Ministry of Communication and Information Technology prepared and tabled the bill in parliament with an objective to have legal provision for the development of information technology, to promote, monitor and regulate it, maintain cyber security, control cyber crime and regulate the usage of social media in the country. Upon approval by the Federal Parliament, the bill will shape as an Act, replacing the existing Electronic Transaction Act, 2063.

What does this bill include?

This bill includes detailed provisions on legal recognition of electronic records, electronic signature, protection and confidentiality of information, domain registration and management, public e-service, digital signature, provisions related to social media, information technology court, national information technology centre.

What’s all the fuss about?

However, the major debate is on the provision related to Social Media. Clause 91 of the bill makes it mandatory for social networking sites like Facebook, Twitter, YouTube and others alike to register themselves in the country. They also need to open their office in the country and abide by its laws, rules and regulations. If not, government holds the authority and power to ban them.

Some provisions of the bill are ambiguous. For instance, Clause 94 restricts anyone from posting improper contents on social media. Clause 96 of the Bill permits government and its authorities to impose penalty of up to 15 Lakhs and up to 5 years of imprisonment for posting such improper contents on social networking sites. But what exactly constitute that “improper contents”? The definition is vague and can be misused by the government to target its critics. If the bill is passed as it is, there is an actual threat of government being more authoritarian and despotic.

Should we be worried if the bill passes?

After all this outrage, there is slim chance of Federal Parliament endorsing it without making necessary amendments. Our Constitution guarantees Freedom of Opinion and Expression under Article 17 (2) (a) as a Fundamental Right of the citizen. Nepal is one of the signatories of the UDHR and holds the compulsive responsibility to implement it. To guarantee Right to Freedom of Speech is binding for the government as it is a vital part of Customary International Law.

The bill hence, cannot snatch away that liberty from us. But by tabling it in the parliament, the Oli-led government has once more indulged itself into a nasty controversy. The damage has been done. What they’ll do to reconcile is all that matters.

Read or download the Bill from here.

 

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