KATHMANDU, June 4: Ncell has paid an additional Rs 13.6 billion to the government as capital gains tax (CGT) on its share buyout that took place over two years ago. Spokesperson for the Inland Revenue Department (IRD) Chandra Kala Paudel informed Republica that the private sector telecom company paid the CGT at the Large Taxpayer’s Office at Hariharbhawan on Sunday.
“The amount also includes the interest for late tax payment,” added Paudel. The share transfer deal was made in December 2015 and Ncell was supposed to pay the tax within fiscal year 2015/16. But the company kept on dillydallying.
Ncell’s decision to pay CGT eventually after denial and dillydallying for about two years is allegedly connected to the arrest of a key tax official who was openly protecting the company and advocating that the buyer is not liable for the CGT.
Why Ncell paid the CGT?
IRD Director General Chudamani Sharma was arrested on Friday on multiple corruption charges by the Commission for the Investigation of Abuse of Authority.
With this tax collection, the government has received a total of Rs 26.4 billion from the Ncell share transfer deal. Malaysian Telecom Giant Axiata had bought 80 percent stakes in Ncell from Swedish Company TeliaSonera at the price of US$1.03 billion. Ncell paid Rs 9.97 billion CGT in May last year.
Likewise, Niraj Govinda Shrestha has already separately paid Rs 2.83 billion CGT on his income from selling his 20 percent stakes in Ncell.
According to an estimate, Ncell has to pay another Rs 6 billion CGT to free itself from the blame of being a tax defaulter. The Office of the Auditor General in its recent report says the government has to recover about Rs 32 billion CGT from Ncell.
Earlier, parliamentary committees were also divided on the issue of recovering CGT from Ncell and Nepal Telecom Authority (NTA) issued the 4G license to Ncell despite a direction from the Public Accounts Committee of parliament not to do so until Ncell cleared the CGT.
Sharma remained silent in the beginning after the record high share transaction in the country in December 2015 but he later claimed that only the seller TeliaSonera has to pay the CGT.
Ncell has rolled out 4G service from Thursday after receiving the permission to do so from NTA despite two parliamentary committees claiming that the company should be allowed to expand its services only after it pays the CGT.
