Nepalese court cuts Ncell capital tax in Axiata in half to RM 762 million

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KUALA LUMPUR (November 22): The Supreme Court of Nepal has ruled that Axiata Group Bhd’s Nepalese unit, Ncell Private Ltd, will remain liable for capital gains tax (CGT).

However, the outstanding amount was halved to 21.1 billion Nepalese rupees (approximately 182.69 million US dollars or 762.26 million ringgit) from the original outstanding amount of NPR 39.06 billion ( approximately 339.63 million US dollars or 1.45 billion ringgit).

In a case filed today with Bursa Malaysia, Axiata – citing the court’s full written judgment dated November 21, 2019 – said the court said the amount of the previous tax assessed by the Bureau of Large Taxpayers (LTPO ) was to be reduced to the extent of the charges allegedly levied under Section 120 (a) of the Income Tax Law of Nepal which were found to be unlawful.

This followed the petition against Nepalese tax authorities LTPO and the Inland Revenue Department of Nepal seven months ago (April 22, 2019), demanding that Ncell pay NPR 39.06 billion in allegedly unpaid CGT.

This means that the court ruled that almost half of the request was illegal.

CGT’s alleged claim arises out of the transaction in which Axiata, through its wholly owned unit Axiata Investments (UK) Ltd, acquired Reynolds Holdings Ltd from TeliaSonera Norway Nepal Holdings AS.

Reynolds is Ncell’s immediate holding company.

The LTPO was supposed to collect the CGT from the seller.

However, as TeliaSonera was no longer present in the country after the sale of Ncell, the tax authorities transferred the burden to Ncell, the buying party of the transaction.

“As one of the largest Nepalese taxpayers, Ncell has paid over NPR 210 billion in taxes since its inception,” Axiata said.

“Ncell also supports, both directly and indirectly, 93,883 jobs and connects 17 million customers on our networks,” the company said, adding that Axiata and Ncell remain fully committed to serving their customers in Nepal and will take all measures available to avoid any interruption of services and operations as a result of this dispute.

Axiata shares closed six sen or 1.4% higher at RM 4.36 today, valuing the company at RM 39.95 billion. Over the past year, the meter has gained about 30% from RM 3.35.

Read also:

https: //www.theedgemarkets.com/article/nepal-court-extends-stay-order-nc …

https: //www.theedgemarkets.com/article/axiata-unit-appeals-nepals-rm145b …


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