NTA fails to recover outstanding dues from telcos

Published On: April 3, 2019 08:10 AM NPT By: Republica  | @RepublicaNepal

Month-long deadline given to clear dues expired on March 10

KATHMANDU, April 3: Nepal Telecommunications Authority (NTA) has failed to recover dues amounting to Rs 2.96 billion from different telecommunication companies. These payables date back to several years. 

The telecommunications regulator had issued a notice on February 11 as per the direction of parliament’s Finance Committee, giving telecommunication companies one-month deadline to clear their dues. The deadline expired on March 10. 

Instead of paying the dues, the telecommunication companies asked the regulator to extend the deadline till mid-July, saying that they need more time to induct more shareholders and investors to pay their dues, according to NTA officials. 

The outstanding dues include taxes and fees like income tax, value added tax, frequency fee, renewal fee and compulsory contribution to Rural Telecommunication Development Fund, according to NTA records. 

Of the nine companies, Smart Telecom owes the highest i.e. Rs 1.4 billion. Likewise, United Telecom Limited and Nepal Satellite Telecom Pvt Ltd owe the government Rs 794 million and Rs 735 million, respectively. 

NTA’s Information Officer Sandip Adhikari told Republica said that the NTA recently decided to extend the deadline till mid-July as requested by some telecom companies. “Some companies even did not respond to our ultimatum,” Adhikari added. “We didn’t stop their operations now as it would affect general public. But mid-July is the final deadline extension.”

According to NTA officials, United Telecom Ltd (UTL) has told the regulator that it was increasing paid-up capital to clear the dues, while Smart Telecom said it would clear dues after bringing new investors. Nepal Satellite Telecom Pvt Ltd, on the other hand, asked whether it could clear dues in installments.

The Finance Committee of parliament had earlier instructed the Ministry of Finance and Ministry of Communication and Information Technology to do needful for recovering the dues from different telecom companies. 

The instruction, however, will not apply to the capital gains tax (CGT) of Ncell until the Supreme Court issues a full text of the verdict on Ncell buyout. Companies failed to clear outstanding dues should be barred from adding new services and facilities and increasing capital, among other things, according to the decision made by the committee. 

The committee had instructed the NTA to start the process of scrapping operating licenses of the companies that failed to clear dues within the deadline.

After studying tax compliance by telecom companies, the committee concluded that there are serious flaws in tax assessment systems. While studying ownership transfer of Ncell, the committee had asked all ministries concerned to submit details of shares transfer of Ncell and Spice Nepal Pvt Ltd, all minutes of decisions, and the list of officials of Ministry of Finance, Nepal Rastra Bank, Inland Revenue Department, Large Taxpayers Office, among others, who took decisions on assessment of CGT in Ncell buyout.

Talking to Republica, Krishna Prasad Dahal, chairperson of the Finance Committee, said that government agencies cannot violate instructions given by the parliamentary committee. “We will take another decision if the issue is lingered further,” he said, adding: “We have not received latest information regarding collection of dues from telecom companies. The parliamentary panel will invite NTA officials for discussion after studying the issue.”

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