‘Clean chit to Ncell on capital gains tax fiasco is wrong’

Kathmandu, March 16: CPN-UML leader and Chairman of Finance committee Prakash Jwala has criticized the Cabinet meeting to gave clean chit to Ncell on the capital gains tax fiasco.

Speaking during an interaction program organized by the Reporters’ Club Nepal today he said, “The government should correct its decision to give clean chit to Ncell on the capital gains tax failure.”

The meeting  last week had endorsed a proposal presented by Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara which stated that capital gains tax should be imposed on seller instead of buyer.

Malaysian telecom company Axiata had bought Reynolds Holding, which held a majority stake in Ncell, from Swedesh-Finnish company TeliaSonera at the value of US$ 1.03 billion in April last year. Reynolds Holding was TeliaSonera’s wholly-owned subsidiary registered at Saint Kitts and Nevis — a tax haven.

The Swedish firm had sold a 60 percent stake in Ncell and also dissolved its interest in an additional 20 percent stake owned by local partner in December 2015.

Ncell officially became a part of Axiata Group on April 12, 2016.

The tax authority started initiation to tax the transaction after TeliaSonera had exited Nepal. The Large Taxpayer’s Office had initially written to TeliaSonera, asking it to submit tax details, but the company argued the deal is not taxable in Nepal. Following such answer from TeliaSonera, the Taxpayer’s Office asked Ncell to file tax return by May 7.

In another note, Jwala cleared that CPN-UML had not been completely able to speak for the local level election as the party was busy in its Mechi-Mahakali Campaign.

He also said that UML was ready to lend any support to the government in election matters.