Why would a buying party ask for an advance tax ruling (ATR) which should have been asked by the seller? Why would it ask it in a personal email to chief of IRD while ignoring repeated calls by the related authority, the Large Taxpayer's Office (LTO) making it clear that the taxes should be paid? Why would a responsible company go to politicians and unrelated bureaucrats looking for 'verbal assurances' about tax exemption in such a situation?
If you think the controversy around the payment of Capital Gain Taxes (CGT) to Nepal for the transaction of shares of Ncell's parent company, Reynolds Holdings between TeliaSonera and Axiata will end soon, you may well have to think again.
It is here to stay for quite some time. As Nepal's tax authorities are examining whether the nearly 10 billion rupees payed by Ncell (i.e. Axiata) amounts to what Axiata has claimed (15% out of 25% to be paid as CGT), the debate around whether the transaction itself involved an organized effort, or a scam, to evade taxes is raging among citizens.
You may then expect that the Axiata officials may be devoted to ending the controversy at the earliest and averting further damage to the Ncell brand. I doubt they are.
In an interview published in today's The Himalayan Times (THT), Simon Perkins, managing director of Ncell has further deepened the confusion on the matter.
Answering the first question about the 'crisis of sorts' faced by Ncell, Perkins says this:
But I guess you know that we made the decision (to pay the tax) even though it was not our responsibility, as capital gains tax should be paid by the seller, not the buyer.