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‘Ncell should be denied 4G licence until it pays CGT dues’

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Kathmandu, January 18, 2017: Lawmakers have insisted that Ncell should not be allowed to roll out 4G service until the private telecom operator clears the outstanding capital gains tax (CGT) payment to the government.

The Sweden-based company TeliaSonera which had a major stake in Ncell, in December 2015, had sold Ncell to Malaysian telecom company Axiata for Rs 143 billion. The deal drew immense criticism as Ncell did not pay CGT as required by the law.

Lawmakers estimate that Ncell is yet to pay Rs 23 billion in CGT to the government. However, the government has not revealed the exact CGT amount that Ncell has to pay while transferring ownership to Axiata.

“There is no doubt that we should encourage telecom operators to adopt new technologies and services. However, any telecom operator or firm should clear all government taxes before expanding new services,” lawmaker Mina Poudel said at a meeting of Public Accounts Committee (PAC), adding that Ncell should be made to clear its CGT payment to the government before allowing it to roll out 4G or any other new services.

The Nepal Telecommunications Authority (NTA) had sought 4G rollout plan from Ncell in the last week of October last year and the privately-owned telco had presented its 4G service plan to NTA on November 4. Though Nepal Telecom (NT) has already begun 4G service in Nepal after obtaining the licence from NTA, the telecommunication regulator has not decided over Ncell’s 4G plan after different parliamentary committees showed concerns over Ncell not clearing its due CGT.

Lawmaker Ramhari Khatiwada said that Nepal should get 25 per cent of the total transaction made while transferring ownership of Ncell to Axiata as CGT. “However, Ncell has not paid such taxes accordingly to the government. At a time when Ncell is facing criticism, there is no point in allowing the company to launch 4G. NTA should give 4G licence to Ncell only after it clears all dues to the government,” Khatiwada said.

However, another member of PAC Tek Bahadur Basnet said that the government should find alternatives to make Ncell pay CGT and not deprive any operator from upgrading to latest technology as this can directly affect a huge number of telecom subscribers.

Speaking on the occasion, NTA Chairman Digambar Jha said that the government has not officially asked NTA not to give 4G licence to Ncell and neither has the government asked NTA to help collect CGT from Ncell.

“The government has not provided the exact figure of CGT that is yet to be collected from Ncell and delay in allowing Ncell to launch 4G service will largely affect government revenue,” Jha said, adding that other related government bodies should be active in collecting CGT from Ncell.

Meanwhile, the PAC, a few weeks ago, had directed Ministry of Finance to collect all taxes from Ncell within three months.