Print Edition - 2017-04-14 | MONEY
LTO: Full report on matter by mid-May
- ncell capital gains tax scam
Apr 14, 2017-
The Large Taxpayers Office (LTO), which is supposed to clarify the government position on the capital gains tax controversy surrounding Ncell, has stated that the process will be concluded by mid-May.
The LTO, under the Inland Revenue Department (IRD), has been under fire for failing to determine the amount that needs to be recovered from a mega deal. In the biggest corporate buyout deal in Nepal, Telia, a Swedish telecom giant, had sold its stakes in Ncell to the Malaysian company Axiata for $1.03 billion in 2015. The government has clearly said 25 percent of the profit made from the sale of Ncell should be deposited as capital gains tax.
It was only after the Public Accounts Committee (PAC) of the Legislature-Parliament set a deadline for the Finance Ministry and the IRD to clarify the government position that the LTO seems to have launched a probe into the Ncell buyout deal. The house committee had directed the tax authorities to complete the process by mid-May.
The LTO has formed a three-member expert team to advise it on Ncell’s ownership transfer case.
“We have already received a preliminary report from the expert panel and expect a full report soon,” Chandrakala Paudel, IRD spokesperson told the Post. “We have sought an extra one month from PAC and will clear our position by mid-May,” he said, adding that the LTO would come out with a specific amount that needs to be recovered in tax.
At a recent PAC meeting, IRD Director General Chudamani Sharma had sought an additional one month for an investigation. Though the committee has not officially granted a deadline extension, PAC Chairman Dor Prasad Upadhyay has hinted that they could consider IRD’s plea considering the complication surrounding the case.
Pointing out the taxman’s incompetency in collecting tax amount due from the sale of Ncell, the Office of the Auditor General (OAG) on Wednesday pressed the government to clear its position on the case at the earliest.
The autonomous body that conducts financial audit of government agencies has particularly blamed the Finance Ministry for not collecting the tax amount on time and has booked arrears of Rs32 billion in the name of the ministry.
Ever since the deal took place, the government has been saying tax would be levied on the transaction, but it has not mentioned the amount that needs to be collected. Following pressure from the government, Ncell has so far deposited Rs 9.97 billion as 15 percent withholding tax, or tax-deductible at source for the capital gains. The payment of this tax amount means the seller earned Rs66.46 billion by disposing its ownership in the telecom company. This tax amount was calculated by Ncell on its own.
Published: 14-04-2017 09:14