Nepal | July 10, 2020

Ncell told to pay Rs 39.06 bn within a week

Sujan Dhungana
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Kathmandu, April 16

The Large Taxpayers’ Office today officially determined Rs 62.63 billion as applicable capital gains tax on the Ncell buyout deal and ordered Ncell to deposit Rs 39.06 billion within seven days, as the telecom firm has already deposited Rs 23.57 billion as CGT and late fee.

The LTO’s direction has come after the Supreme Court last week released the full text of its verdict of February 6 ordering the government to recover applicable CGT on the corporate deal of Ncell from Ncell and its Malaysian-based parent company Axiata within three months.

“As Ncell accepted the CGT determination and direction letter from LTO today itself, the telecom firm will have to deposit the CGT amount in the government coffers within the next seven days,” reads a press statement issued by LTO.

Axiata Group Berhad, through its wholly-owned subsidiary, Axiata Investments (UK) Ltd, had bought 80 per cent stake in Ncell for $1.4 billion in December 2015.

Initially, the foreign investment in Ncell had come from a shell company called Reynolds Holdings registered in Saint Kitts and Nevis in the West Indies. TeliaSonera Norway Nepal had 75.45 per cent stake in Reynolds and the remaining 24.55 per cent shares in the shell company were held by SEA Telecom Investments BV, a company owned by Kazakhstan-based Visor.

LTO has stated that Ncell should pay 25 per cent of the profit made in the buyout deal, which is equivalent to Rs 35.91 billion as CGT to the government. Along with interest worth Rs 8.4 billion and late fee worth Rs 18.3 billion, the total applicable CGT on the Ncell buyout deal has been calculated at Rs 62.63 billion.

 


A version of this article appears in print on April 17, 2019 of The Himalayan Times.


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