Ncell CGT issue

PAC to question PM over Ncell tax

Published On: March 17, 2017 12:40 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, March 17: The Public Accounts Committee (PAC) of the parliament on Tuesday decided to summon Prime Minister Pushpa Kamal Dahal for questioning in connection to the cabinet's decision to recover capital gains tax (CGT) from TeliaSonera.

Dissatisfied with unclear statement of Minister for Finance Krishna Bahadur Mahara on the issue in Thursday's meeting, the house panel decided to question the Prime Minister why the issue to be determined by a tax officer was put in the cabinet's agenda. 

In the meeting, Mahara maintained that the cabinet did discuss the issue last week but no decision was taken“ "The PM brought the agenda directly in the cabinet meeting based on an application registered by Ncell at the Office of the Prime Minister and Council of Ministers demanding to settle the CGT issue as per the direction of different parliament committee, including the PA”," Mahara said. 

Concluding the meeting which ran for nearly three and half hours, PAC Chairperson Dor Prasad Upadhyaya said that he would fix the date of the next meeting after consulting with the prime minister“ "PM Dahal can make the issue clea”," he added.

Speaking at the meeting, lawmakers criticized the cabinet, including the Prime Minister, saying that the cabinet had breached the authority of tax officers. They alleged that the issue was discussed in the cabinet with the ill intention of dismissing the issue as TeliaSonera, the seller, has already left the country.

The PAC had, on January 16, directed the government to recover CGT from Ncell within three months. Though two months have already elapsed, nothing has been done to recover CGT.

Lawmaker Dhanaraj Gurung wondered whether the PM and Finance Minister turned into tax officers overnight. Another lawmaker Ram Hari Khatiwada said that Rs 33 billion, to be recovered from the transaction, will be sufficient to distribute to the recently formed 744 local units.

Last week, the cabinet discussed the issue and decided to recover CGT from TeliaSonera. But it is not clear whether the decision has been written in the meeting minutes.

Speaking at the meeting, Revenue Secretary Rajan Khanal suggested to the PAC to not bar Ncell from rolling out new services as the operation has been paying taxes regularly. 
PAC on January 25 decided to bar Ncell from introducing new services until its clears CGT.

Khanal, however, drew heavy criticisms from the lawmakers. 

Lawmaker Gurung also questioned why the government did not ask Ncell to produce Sales and Purchase Agreement (SPA) after is ownership transfer“ "The government should summon Ncell's managing director and get the SPA immediately. The SPA will ascertain who should pay the CG”," Gurung added.

Finance Minister Mahara, at the end of the meeting, expressed commitment to recover CGT within 30 days.

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