Print Edition - 2016-05-05 | MONEY
LTO turns down Ncell’s request for more time
- capital gains tax issue
May 5, 2016-
Large Taxpayer’s Office (LTO) on Monday turned down Ncell’s request for an additional 90 days’ time for the latter to talk to its previous owner TeliaSonera about the capital gains tax (CGT) issue.
Responding to Ncell’s letter dispatched earlier in the day making the aforementioned request, the LTO wrote to Ncell stating there is no such provision in the Income Tax Act.
Previously, the tax authority had said it would wait for the Swedish-Finnish company till May 7 to submit tax returns. It had warned of initiating legal action against the company is the latter failed to submit the tax returns.
As per the Income Tax Act, a taxpayer should submit tax returns within 25 days of the following month from the month of the transaction.
According to a highly-placed government source, Ncell is exercising to buy time so that its plan to increase its authorised capital gets materialised. “It looks like Ncell’s shenanigans to fool government authorities and get approval from the Department of Industries (DoI) to increase its authorised capital.”
Ncell has submitted a proposal to the DoI to increase its authorised capital to Rs155.33 billion from existing Rs17 billion. But officials are reluctant to a give a go-ahead to Ncell’s proposal, with the CGT issue still unresolved.
In a record deal, Axiata had bought Reynolds Holding, the owner of Ncell, from TeliaSonera at an enterprise value of $1.03 billion. Reynolds Holding was TeliaSonera’s wholly-owned subsidiary, registered at Saint Kitts and Nevis, a tax haven.
According to the source, Ncell’s capital-hike proposal will be presented at the meeting of the Industrial Promotion Board (IPB) chaired by the Industry Minister. The source claimed internal homework is under way to approve Ncell’s proposal through the IPB of. “Ncell’s request for the additional time is part of the homework,” said the source.
If the capital-hike plan is approved, it will make way for the repatriation of the dividend by Renyolds Holdings, which was halted by the DoI and Nepal Rastra Bank (NRB). “It seems the capital plan is to pave the way for repatriating the bonus,” said the source. “Ncell could, however, use the dividend amount for capital increment in Nepal too.”
Meanwhile, a majority of the Parliamentary Accounts Committee members expressed concerned about the Ncell CTG issue on Wednesday. Lawmaker Mamata Giri said the deal must be brought under the tax bracket and the license of the telecom company must be scraped after that.
MP Birendra Mahato said the Commission for Investigation of Abuse of Authority must look after corruption cases of larger scales rather than petty ones.
MP Ram Hari Khatiwada demanded investigation into a possible involvement of Cabinet members in the Ncell deal.
Published: 05-05-2016 08:38