Nepal SC Orders Top Telecos To Pay Pending Capital Gains Tax

Sweden-based TeliaSonera skipped capital gains tax on the sale of its share (80 percent) in Ncell to Axiata in April 2015
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Nepal SC Orders Top Telecos To Pay Pending Capital Gains Tax

In a major decision regulating tax payments, the Supreme Court has directed the leading telecom service providers to pay their pending taxes very soon.

The apex court has ordered Nepal’s telecom provider and Malaysia-based Axiata to pay their pending capital tax gains to the government within the next three months period.

The company’s buyout, sale of shares and distribution of bonus will be halted till the payments are made, SC added.

In this regard, a special bench led by Chief Justice Cholendra SJB Rana and other Justices issued a mandamus order in the name of defendants, Ncell and Axiata, urging them to pay the huge tax they had skipped three years ago.

The issue dates back to the time when Axiata bought Reynolds Holdings, a majority shareholder in Ncell, from Sweden-based TeliaSonera for NPR 1.03 billion.

Reynolds Holdings is the subsidiary of TeliaSonera and is registered in tax haven of Saint Kitts and Nevis.

Civil society members argue that tax evasion has happened during the transfer of management from TeliaSonera to Axiata.

Ncell has reportedly already paid NPR 23.57 billion in two instalments as an applicable tax on the profit generated through its sale, with NPR 9.97 billion in May 2016 and NPR Rs 13.60 billion in June 2017 owing to the intense pressure from a cross-section of the society.

Whereas, TeliaSonera failed to pay capital gains tax on the sale of its share (80 percent) in Ncell to Axiata in April 2015. As of June 17, 2017, the Swedish firm’s tax liability stands at NPR 60.71 billion.

April 11, 2019 |

 
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