Kathmandu, Jan 4. Telecommunication service company Ncell accrued Rs 60 billion to the government. Even though it had paid Rs 65 billion capital gain tax in just a year ago, government again preparing to levy the amount with regards to tax on changes of ownership. Tax administration department took the decision to impose the tax due to change in the ownership of Ncell in line with the provision of Income tax act.
Formerly known for TM International Berhad has transferred its ownership tothe Malaysian Multinational Company, Axiata Group Berhad in 2009 from which Ncell axiata has become new brand. The government has already received25 per cent capital gain tax incurred at the time of change of ownership and cent percent tax and its interest on defaulting to pay on stipulated time.
Though government had imposed capital gain tax, it had not levied tax on change of ownership provisioned in clause 57 of the Income Tax Act. In this regard, Inland Revenue Department has informed that government has determined to impose ownership transferred tax.
The clause of Section 57 has provision which mention that ‘ In case the ownership of the entity changes by fifty per cent or more as compared to its ownership until before the last three years, it shall be deemed to have disposed the property under its ownership or liability it has borne’.
The tax department stated that ‘according to the provision, company has to pay the tax that consists of 25 percent of aggregate net worth (segregating assets and liability) after evaluation of aggregate liability and assetsif company transfers more than 50 per cent share’. Ncell is liable of 25 percent of aggregate net worth that comprises of Rs. 60 billion.
There will be reply to petition of largest tax payer just as Ncell has been informed about the tax incurred on the transfer of ownership. Ncell is liable to respond an appropriate reason if it dissents to pay.
In 11 april 2016, 80 percent of ownership of Ncell had been sold for Rs. 143.65 billion. It has paid capital gain tax for it. Honoring the supreme court decision, it has paid the amount on 12 April 2020.Ncell had paid Rs. 24.43 billion that included tax on profit and penalty.
Department of tax had sent letter to pay Rs. 22.44 billion including penal tax to Ncell not withstand the Supreme Court instruction to pay Rs. 21.10 billion tax on profit. Meanwhile Ncell is preparing to legally challenge the department of tax against its decision of determining tax policies.
