Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Inland Revenue Department (IRD) has initiated a probe into Axiata’s departure from Ncell, suspecting potential tax evasion by the company.
The scrutiny began following Axiata Group’s sale of an 80% stake in Ncell to Spectrlite UK for a nominal amount of US$50 million (Rs 6.5 billion). Axiata had obtained controlling stakes in Ncell in 2016 through the acquisition of Reynolds Holding for US$1.365 billion (Rs 143 billion).
Dirgha Raj Mainali, Director General at the Inland Revenue Department, highlighted that the company has not officially notified tax offices about its exit from the Nepali market. Mainali stated, “We have not received any formal letter from the company. The large taxpayer offices have initiated a detailed examination concerning due diligence audit and fair valuation of shares regarding Axiata’s departure from Ncell.”
In a statement released on Wednesday, Axiata Group Berhad announced its intention to sell assets, aiming to exit Ncell. The company cited declining revenue from its Nepal-based business and attributed the decision to the “current conditions of unfair taxation and regulatory uncertainties affecting its long-term sustainability.”
Despite its unilateral decision, Axiata failed to inform relevant government authorities, including the tax offices and the Nepal Telecommunications Authority (NTA), the sector’s regulator.
The NTA, in response, sent a letter to Axiata on Friday, urging the parent company of Ncell to adhere to legal procedures. The regulator emphasized that companies must obtain prior approval from the NTA when selling or transferring shares to other parties.
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