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Monday, May 20, 2019

Nepal Satellite Telecom yet to clear billions

Internal Revenue Department

Internal Revenue Department. Photo: ird.gov.np

Kathmandu, May 20

The Inland Revenue Department has published a notice asking Ajeya Sumargi-owned Nepal Satellite Telecom Company to foot Rs 4.31 billion capital gains tax out of the gains the company made while transferring 75 per cent of its share to TeliaSonera eight years ago.

In 2011, Nepal Satellite Telecom had divested 75 per cent stake to TeliaSonera through Cyprus-based Airbell Services for Rs 5.71 billion, recording a profit of Rs 5.63 billion. Though Nepal Satellite Telecom had to foot Rs 1.4 billion CGT out of this divestment deal, IRD mentioned that the company had not paid applicable taxes despite repeated calls from the government agency.

As per existing law, Nepal Satellite Telecom is required to pay 25 per cent of the gains made through the corporate deal as CGT to the government. Though Nepal Satellite Telecom had to initially pay Rs 1.4 billion CGT, the amount has now ballooned to Rs 4.3 billion after including late fees and other penalties, say IRD officials.

IRD had determined the applicable CGT worth Rs 4.31 billion on the aforementioned transaction on April 25 and had sought objection (if any) from Nepal Satellite Telecom. Nepal Satellite Telecom submitted its clarification on the tax assessment on May 10. The IRD, after analysing the clarification, sent a letter to the company stating it was not satisfied with the response and asked the telecom firm to pay the determined tax as soon as possible.

IRD then went on to publish a public notice after Nepal Satellite Telecom refused to accept the IRD tax assessment letter. “We had sent the letter through postal service and the company’s e-mail address,” reads the IRD’s notice.

Nepal Satellite Telecom officials were not available for comment.

Earlier, in 2017, Office of the Auditor General had stated in its report that Nepal Satellite Telecom was yet to pay CGT on the transaction of 2011.

As the government is under pressure to meet the revenue target for the current fiscal, it has become strict about collecting taxes in recent months. As it is becoming increasingly clear that Ncell is unlikely to foot above Rs 39 billion in taxes (applicable CGT on Ncell buyout deal) any time soon, there is additional pressure on the government to meet the revenue target.

 

The post Nepal Satellite Telecom yet to clear billions appeared first on The Himalayan Times.



from Business – The Himalayan Times http://bit.ly/2Jw7N85

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