Ncell overtakes Nepal Telecom as largest taxpayer

POST REPORT KATHMANDU, OCT 23

The government’s revenue collection from telecom companies soared in the last fiscal year 2012-13. According to the Nepal Telecommunications Authority (NTA), six telecom companies paid Rs 35.34 billion in taxes under different heads. Ncell accounted for more than 50 percent of this figure, pouring Rs 20.76 billion into the government coffers. State-owned Nepal Telecom (NT) chipped in Rs 13.39 billion, according to the NTA. As per the latest figures, Ncell has overtaken NT as the largest taxpayer in the sector. “There has been a massive growth in tax payments mainly due to the increased earnings of Ncell,” said Purushottam Khanal, director of the NTA. He added tax payments by all the telecom companies had been increasing along with their rising subscriber base. The number of users of telecom services reached 21.3 million by the end of the last fiscal year, up from 17.2 million a year ago. Milan Sharma, corporate communication expert of Ncell, said that tax payments to the government had soared with an increase in business volume and frequency fees. “Revenue has grown along with the user base,” he added. As per the NTA, the Rs 35.34 billion in taxes collected in the last fiscal year were advance income tax (Rs 7.94 billion), value added tax (Rs 10.46 billion), customs duty (Rs 1.76 billion), royalty (Rs 1.48 billion), contribution to the Rural Telecommunication Development Fund (Rs 1.15 billion), frequency fee (Rs 3.55 billion), tax deduction at source (Rs 2.55 billion), telecom service charge (Rs 4.47 billion), ownership tax (Rs 950.69 million) and property and vehicle tax (Rs 258,240). Tax collection from other companies Smart Telecom, Nepal Satellite Telecom and STM Telecom Sanchar has also gone up. NTA said a rise in the number of users, pricing for additional spectrum being used by the operators and fixing of 3G spectrum fee were the reasons behind the growth in tax collection from telecom companies. Ncell and NT paid Rs 1.92 billion as 3G spectrum fee in the last fiscal year. The taxes paid by the telecom companies do not include the Rs 6 billion paid by NT to the government as dividend and the Rs 5 billion paid by Ncell and the Rs 2.5 billion paid by NT as part payment of their licence renewal fee. REVENUE CONTRIBUTION COMPARED Operator 2012-13 2011-12 Ncell Rs 20.76b Rs 11.23b Nepal Telecom Rs 13.39b Rs 12.38b United Telecom Limited Rs 584.27m — Smart Telecom Rs 334.75m Rs 147.26m Nepal Satellite Telecom Rs 193.86m Rs 69.68m STM Telecom Sanchar Rs 73.45m Rs 39.59m (Source: Nepal Telecommunications Authority) telecom sector revenue