If you ever wanted to know how lobbying works, or how any government loots…read on:
The government makes a lot of money by introducing a Security Transaction Tax – paid by all buyers and sellers of equities. This is a fantastic tax – it collects a lot of money and the government has to collect it ONLY from 2 of the stock exchanges. It is very, very efficient.
Capital gains is a tax that you pay on the buy and sell transactions that you do IF YOU MAKE A PROFIT. Now the government has come out with a hair brained scheme which says the ‘small investor’ (the government does not know the difference between an investor and a trader, but that is another post, is it not?).
Here if a small investor (govt words) makes a capital gains, he would pay HALF the tax.
The government will make a lot more in security transaction tax – STT – than what it can ever lose by giving this 50% discount to a guy.
This is a fantastic scheme and will help brokerages earn more, and the government to earn more STT.
Will it improve the ‘equity culture’ of the country? You gotta be joking. Tickle me.
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