After TeliaSonera’s statement that it is not liable to pay capital gains tax (CGT) for the transfer of its stake in Ncell to Malaysian telecom giant Axiata, tax authorities in Nepal have said they will wait till May 7 for the Swedish-Finnish company to submit tax returns.

“Or else legal action will be initiated as per the Income Tax Act,” said the tax authorities. As per the Income Tax Act, the taxpayer should submit tax returns within 25 days of the following month of the transaction month.

A senior official at the Large Tax Payers’ Office (LTO) told the Post that they would even impose penal interest and fine in addition to CGT if TeliaSonera fails to act by May 7 deadline.

TeliaSonera on April 12 had formally announced that the divestment was formally completed and that its stakes in Ncell had been officially acquired by Axiata. Axiata had bought Reynolds Holding, the owner of Ncell, from TeliaSonera at an enterprise value of $1.03 billion. Malaysian company had also acquired 19.6 percent stake of Visor Group of Kazakhstan to have 80 percent stake in Ncell.

Tax officials say that Nepal has every right to impose tax under the Income Tax Act.

In a letter, the LTO had reminded the Swedish company about its tax liability as per Nepal’s Income Tax Act.

“As it has been seen that the rights including interest of the shares of Ncell Private Limited, Nepal owned by TeliaSonera have been sold to Axiata, I would like to remind you that, pursuant to Income Tax Act 2002, there is a clear legal provision for tax liabilities in the profits earned from the disposal of interests in the shares of Ncell Private Limited,” reads the LTO letter.

The LTO has also informed the TeliaSonera that in case of failure to do so, action will be taken as per Income Tax Act and related regulations as well as other prevailing laws of Nepal.