Friday 29 Mar 2024
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KUALA LUMPUR (April 17): Axiata Group Bhd says today that its subsidiary Ncell Private Ltd has received a letter issued by the Nepalese Large Taxpayers Office (LTPO) to pay an outstanding sum of capital gains tax of NPR39.06 billion (approximately RM1.45 billion).

In a statement, Axiata explained that the tax to be collected from Ncell is in relation to the indirect transfer to Axiata Investments UK Ltd (Axiata UK) of an 80% stake in Ncell, following Axiata UK's acquisition of Reynolds Holdings Ltd from TeliaSonera Norway Nepal Holdings AS.

"The letter stated that the assessment order issued against the seller (TeliaSonera), in relation to the transaction, has been transferred to Ncell and further states that the balance amount of the capital gains tax arising from the transaction due is NPR39.06 billion," it said.

"Ncell has been ordered to deposit the said amount within seven days, or by April 22," Axiata added.

The sum to be paid come in within expectations of analysts who cover Axiata, after the group confirmed the issuance of Nepal Supreme Court's order on Ncell's tax obligation last week. 

It is understood that Axiata has paid some NPR23.6 billion in capital gains tax for the acquisition previously. This means the total capital gains tax that Axiata has incurred for the Ncell buyout amounts to NPR62.66 billion now. 

In its statement today, Axiata said it is currently reviewing the letter and considering the appropriate course of action.

It also stressed that Axiata and Ncell have dutifully and responsibly complied with all relevant regulatory and legal requirements in relation to the transaction and acknowledged the order without prejudice to their remedial rights.

Axiata also reiterated that as the country’s largest taxpayer, Ncell had contributed US$1.17 billion in taxes to the Nepalese Government since fiscal year 2014/2015.

In 2018 alone, Ncell paid US$257 million which accounted for 4.2% of total tax revenue of Nepal’s Government that year, according to Axiata. Over the last two fiscal years, Ncell’s total accumulated capital investment reached US$164 million, with US$66 million recorded in the last fiscal year.

"We believe that the Government of Nepal will be supportive of our commitment and use our investment as a demonstration of the willingness and openness of Nepal to attract further foreign investment," Axiata added.

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