By Our Reporter
Malaysian telecom giant Axiata had bought Reynolds Holding, which held a majority stake in Ncell, from TeliaSonera at around 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 TeliaSonera AB had sold its entire stakes in Ncell as part of its strategy to exit Asian and former Soviet markets to focus on Europe and its home Nordic region. 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.
All these facts have been known to everyone interested in the tax issues regarding this sale of Ncell. A lot of water has passed under the bridge regarding this issue and there have been plenty of expert opinions regarding this matter. The director general of Internal Revenue Department gave directives for Axiata to pay the taxes basing his decision on article 95 of the law despite everyone being very much aware of the fact that this tax should be paid by the seller rather than the buyer.
This issue has taken so much prominence that even the prime minister had to get involved in it and here are some of his thoughts:
“The government stresses on recovering the CGT. The government is also concerned where the mistake happened in the past. Who let the seller of the company go without paying the CGT when our law states that the CGT should be recovered from the seller,” said PM Dahal
“We should investigate who let the seller go without paying the tax and why. The government will look into the issue and find out how the concerned government agencies could not recover the tax, which else government officials are responsible for it,” the PM added.
“The government has not taken any decision on recovering the CGT so far but the government is determined recover the CGT. By the meantime, the government is sensitive that this issue should not give negative impression to the foreign investors,” said PM.
Both TeliaSonera and Axiata are public companies in their respective countries. The Nepali taxmen started an initiative to tax the transaction only after TeliaSonera exited Nepal.
Ncell tax episode: Has the public been fooled?
By Our Reporter