Giving a clear verdict on over three-year-long case, the Supreme Court on Thursday aptly ended the protracted dispute about the capital gains tax (CGT) of the Ncell and Axiata companies directing them to pay over Rs 61 billion to the government. The verdict by the five-member bench of the apex court has bolstered the public trust on the judiciary and the rule of law. It has spread a strong message that if all the branches of the state work honestly, the authorities can hold everyone to account irrespective of their connection to big power centers.

Right since the TeliaSonera, owner of a major mobile phone service provider, sold its share of the Ncell to the Axiata, a Malaysia-based telecommunication company, the issue was unnecessarily complified by parties involved in the transaction, some politicians, key officials in the concerned authorities, ministers of successive governments, parliamentarians and some middlemen. It was unfortunate that some of our leaders across the party lines and top bureaucrats vocally spoke in favor of the company saying that the government can’t force the buyer, Axiata, to pay the CGT. There were some experts to support such views too. But, some incumbent and retired bureaucrats, civil society members and knowledgeable experts consistently spoke against the conspiracy that caused the loss of billions of rupees to the state coffers. On their part people also raised advocacy through various means—including social media platforms. The court verdict has made the people feel justice rolls down finally.  

The exact amount of the figure to be recovered from the telecommunication company and various other issues will be clear when the Supreme Court issues the full text on the verdict. The tax officials have said that as of June 17, 2017, the due tax amount was Rs 60.71 billion and that they are yet to add the fine and interest amount since June 2017. They have said they will calculate it as per the details to be given in the court’s full text, expected to be issued in few days. So the role of civil society and independent pressure groups is going to be equally crucial in the days to come as well. All must watch and keep vigil on the role of politicians, ministers, parliamentarians and concerned authorities in the remaining process as well until the money is recovered fully.

Had our officials clearly told the concerned company, without any ifs and buts, to pay the tax amount, the issue would have been settled three years ago. As the government has announced to be working to attract more international investment, such a situation mustn’t be repeated. The government can declare flexible tax policies on rational ground in a transparent way to attract investment. But the authorities must be strict and transparent when it comes to collecting tax, which is one of the key responsibilities of the state agencies. Genuine international investors however needn’t to worry just based on this single case.

Government should do needful to attract more Foreign Direct Investment (FDI) through clear policies and effective implementation that has become imperative. Genuine investors prefer the place where tax laws are clear, authorities are transparent and investors don’t need to pay kickbacks. There mustn’t be any maneuverings in recovering tax amounts taking benefit of legal loopholes. Anyone evading tax and the accomplice must be held to account. There must not be any ifs and buts in executing the court verdict which will bring to the government coffers billions of rupees.

 
• Ncell
 
• Teliosonera
 
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