Ncell ordered to pay RM1.45b capital gains tax in 7 days — Axiata

TheEdge Thu, Apr 18, 2019 10:24am - 4 years View Original


KUALA LUMPUR: Axiata Group Bhd said yesterday that its subsidiary, Ncell Private Ltd, has received a letter issued by Nepal’s Large Taxpayers Office to pay an outstanding sum of capital gains tax of 39.06 billion Nepalese rupees (RM1.46 billion).

The tax is in relation to the indirect transfer to Axiata Investments UK Ltd of an 80% stake in Ncell, after the group bought out the stake from TeliaSonera Norway Nepal Holdings AS, in 2015.

The sum to be paid is not unexpected after the group confirmed the issuance of Nepal’s Supreme Court’s order on the tax obligation last week.

It is understood that Axiata has paid capital gains tax of some 23.6 billion Nepalese rupees for the acquisition previously. This means the total capital gains tax that Axiata incurred for the buyout is now 62.66 billion Nepalese rupees.

“The letter stated that the assessment order issued against the seller (TeliaSonera), in relation to the transaction, has been transferred to Ncell and further states that the balance amount of the capital gains tax arising from the transaction due is 39.06 billion Nepalese rupees,” Axiata said in a statement yesterday.

“Ncell has been ordered to deposit the said amount within seven days, or by April 22, 2019,” Axiata added.

Axiata is currently reviewing the letter and considering the appropriate course of action.

It also stressed that Axiata and Ncell have dutifully and responsibly complied with all relevant regulatory and legal requirements in relation to the transaction and acknowledged the order without prejudice to their remedial rights.

Axiata also reiterated that as the country’s largest taxpayer, Ncell contributed US$1.17 billion in taxes to the Nepalese government since the fiscal year 2014/2015.

In 2018 alone, Ncell paid US$257 million which accounted for 4.2% of total tax revenue of Nepal’s government that year, according to Axiata. Over the last two fiscal years, Ncell’s total accumulated capital investment reached US$164 million, with US$66 million recorded in the last fiscal year.

“We believe that the government of Nepal will be supportive of our commitment and use our investment as a demonstration of the willingness and openness of Nepal to attract further foreign investment,” Axiata added.

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