PM says govt determined to recover CGT in sale of Ncell shares
April 2, 2017 10:05 AM NPT
KATHMANDU, April 2: Prime Minister Pushpa Kamal Dahal said that the government is determined to recover capital gain tax (CGT) on the transaction happened while selling and purchasing GSM operator Ncell.
TeliaSonera had sold the company to Axiata last year and the Government of Nepal is yet to recover CGT in the sale of the Ncell shares.
Speaking in the television program 'Sidha Kura Pradhanmatri Saga' on Saturday, PM Dahal said that the government would investigate on who let the seller of the telecommunication company go without recovering the CGT and why.
"The government stresses on recovering the CGT. The government is also concerned where the mistake happened in the past. Who let the seller of the company go without paying the CGT when our law states that the CGT should be recovered from the seller," said PM.
"We should investigate who let the seller go without paying the tax and why. The government will look into the issue and find out how the concerned government agencies could not recover the tax, which else government officials are responsible for it," the PM added.
When asked how the government would recover the CGT when the seller, TeliaSonera, has already left the country selling the company, PM Dahal said that the government is determined to recover the CGT and study all the backgrounds how the situation emerged.
"The government has not taken any decision on recovering the CGT so far but the government is determined recover the CGT. By the meantime, the government is sensitive that this issue should not give negative impression to the foreign investors," said PM.
Malaysian telecom giant Axiata had bought Reynolds Holding, which held a majority stake in Ncell, from TeliaSonera at around US$ 1.03 billion in April last year.
Reynolds Holding was TeliaSonera’s wholly-owned subsidiary, registered at Saint Kitts and Nevis -- a tax haven.
The TeliaSonera AB had sold its entire stakes in Ncell as part of its strategy to exit Asian and former Soviet markets to focus on Europe and its home Nordic region. The Swedish firm had sold a 60 percent stake in Ncell and also dissolved its interest in an additional 20 percent stake owned by local partner in December 2015. Ncell officially became a part of Axiata Group on April 12, 2016.
Both TeliaSonera and Axiata are public companies in their respective countries. The Nepali taxmen started an initiative to tax the transaction only after TeliaSonera exited Nepal.