Govt determines applicable taxes in Ncell deal
Kathmandu, June 6
Almost one-and-a-half years after the TeliaSonera-Axiata corporate deal of Ncell, the government has finally determined the tax amount that Nepal should get out of the record Ncell divestment deal struck in December of 2015.
Large Taxpayers’ Office (LTO), on Monday, sent a letter to the Swedish firm TeliaSonera to pay Rs 61 billion in applicable taxes in the Ncell deal. “The LTO has sent a letter to TeliaSonera via Ncell to pay the tax amount to this effect as soon as possible. The government will wait for TeliaSonera’s response before deciding on further legal proceedings in the Ncell deal,” Dhaniram Sharma, deputy director general of Inland Revenue Department (IRD), said, adding that the company will have to respond to LTO within 15 days.
Swedish telecom giant TeliaSonera had divested its shares in Ncell to the Malaysian telecom company Axiata for almost Rs 145 billion in December 2013. However, the deal landed in controversy after Nepal did not receive the applicable CGT from the deal, though the existing laws state that the country should have received 25 per cent of the
total profit made in the deal as CGT, which according to government officials is equivalent to almost Rs 36 billion.
However, the LTO has determined the applicable tax in the Ncell deal at Rs 61 billion, including applicable capital gains tax (CGT) of Rs 36 billion, fine due to delay in payment (almost Rs 18 billion) and interest rate on taxable amount (Rs seven billion).
Interestingly, the LTO has determined the applicable tax in Ncell deal after Ncell recently paid Rs 13.6 billion CGT to the government. The decision of the government has also come after the Commission for the Investigation of Abuse of Authority last week arrested Chief of IRD Chudamani Sharma on charge of revenue embezzlement. Sharma had been handling the CGT issue of Ncell.
IRD officials said that TeliaSonera should now assess the actual applicable tax that it is liable to pay to Nepal from the deal as Ncell has already deposited altogether approximately Rs 26 billion in taxes to the government. Ncell, on Sunday, had filed CGT worth Rs 13.6 billion at LTO office. The telecom company had earlier submitted almost Rs 12.5 billion in taxes at LTO.
Meanwhile, the government is yet to decide further steps if TeliaSonera does not respond to the letter or refuses to pay the taxes.