KATHMANDU, July 23: The Industrial Promotion Board (IBP) is undecided on Ncell's capital increment proposal even though it has already been 10 months since the operator submitted its plan for approval.
Despite holding two rounds of meetings, the board has not been able to decide on Ncell's plan to invest Rs 133.64 billion till 2020. The third meeting, which was planned for last week, has been postponed indefinitely.
Minister for Industry Som Prasad Pandey, who chairs the board, said they were trying to be clear on their jurisdiction on the issue. “As we need more time to study the issue, it might take some more time,” he added.
The meeting of IBP held on July 6 had moved to close to approve the capital increment and expansion plan by slapping a fine of Rs 500,000 as Ncell had not taken prior approval while making capital investment. The board was preparing to approve capital increment and business expansion plan worth Rs 73 billion as Ncell had not sought pre-approval for investments made since 2007. Before that, it had sought approval for investment worth only Rs 17 billion even though its paid-up capital is only Rs 100 million.
Meanwhile, recent instruction by the parliamentary Finance Committee not to endorse Ncell's capital expansion plan until capital gains tax (CGT) issue is settled has put IBP in a state of confusion.
“The indecision on the issue has affected many other agendas of the board,” an official of Department of Industry said, seeking anonymity as he is not authorized to talk to media.
A high-level official of the Ministry of Industry said that IBP's decision does not affect the role of agencies that collect taxes. “We only approve their capital increment and investment plan which is already in the balance sheet of the company," the official added.
The parliamentary committee has clearly stated that TeliaSonera - the erstwhile owner of Ncell - should pay CGT as it earned the capital by selling shares of the company operating in Nepal.
In a recent interview with Republica, Ncell's Managing Director Simon Perkins claimed that the seller is responsible for paying CGT. He had also referred to parliament's Public Accounts Committee's recommendation on the issue.
Axiata Group has already unveiled plan to invest US$ 120 million in 2016.
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