Ncell pays all due of Capital Gain Tax
Ncell, the largest private telecom operator in Nepal have submitted all the remaining dues of Capital Gain Tax (CGT) this sunday (12 April 2020). Ncell paid the Large Taxpayers Office under the Inland Revenue Department Rs 14 billion and 335.6 million (Rs 14 Arba and 33 Crore )in its last installment.
With this payment, it have settle its 4 years long dispute of Capital Gain Tax. The controversy had begun in April 2016 with a buyout deal between Teliasonera, a Swedish-Norwegian company, and Axiata (UK). After a dispute between the company and the government, the Supreme Court had told the company to pay Rs 23 billion and 435.6 million in the CGT.
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So what is Capital Gain Tax?
A capital gain is the difference between the purchase price (the basis) and the sale price of an asset. So capital gains tax is a levy(tax) assessed on the positive difference between the sale price of the asset and its original purchase price.
So the law of nepal states that for any company or firm operating here sales or transfer the shares/ownership to other then they must pay the gain tax. Suppose a “X” company operates here with some amount, with years passed, their value will also rise in the market. So when that X company gets sold then that X will be sold at the higher price than the starting price. So the difference between the final sell price and the initial amount will be used to calculate the capital gain tax. However, the CGT will be the certain percentage depending upon the asset.
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Where did Ncell involved in CGT?
Before Axiata buys the Ncell, Ncell was operated by Telia, a swedish multinational telecom company. Axiata, a Malaysian conglomerate buys the Ncell in April 12, 2016. During the acquisition, the capital gain tax was not paid to the government. So later supreme court orders the Ncell to pay 23 billion. Earlier, Large tax payers have calculated the total of Rs 62.63 billion as CGT including taxes and fines.
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