Govt collects Rs 3b in telecom royalties

KATHMANDU, FEB 15 -The government’s royalty income from the telecom sector jumped 17.18 percent this fiscal year, with the exchequer raking in Rs 3 billion from the telecom , internet and network service providers operating in the country.


The sum has been calculated on the basis of the cumulative income of Rs 74.45 billion made by the licensees of the Nepal Telecommunications Authority (NTA) in fiscal 2012-13. In 2011-12, the government collected Rs 2.56 billion in royalties on the telecom sector’s income totalling Rs 64.52 billion. As per the Telecommuni-cation Act, NTA licensees are required to pay 4 percent of their total income as royalty to the government. Each year, the companies have to pay this tax by mid-January. NTA officials said that the total royalty for this year was based on the last fiscal year’s audit reports of the companies.

Dipesh Acharya, deputy director at the NTA, said that the royalty collection increased chiefly due to the ballooning business of major companies like Nepal Telecom (NT) and Ncell which also operate data services.  Private company Ncell paid Rs 1.55 billion on its income of Rs 38.76 billion. State-owned NT paid Rs 1.36 billion and United Telecom Limited (UTL) paid Rs 21.85 million on its annual income of Rs 546.31 million. Similarly, STM Telecom paid Rs 6.72 million on its annual earnings of Rs 168 million.

The NTA said that two telecom companies, Smart Telecom and Nepal Satellite Telecom, are yet to pay their taxes which come to Rs 27.66 million and Rs 6.2 million respectively.

Among the ISPs, Subisu Cable Net, Communication and Communicate and Mercantile Communications paid Rs 15 million, Rs 4 million and Rs 3 million respectively. However, other major ISPs like World Link, Web Surfer and Broad Link have not yet cleared their royalty dues to the government.

A number of companies have not submitted their audit reports and stated how much they owe the government in taxes. They have been claiming that there were “no sales” during the last fiscal.

NTA officials said that ISPs like Everest Net, Otel, Satelink Nepal and Astha Network have not handed in their annual audit reports.

A few months ago, Mega Broadcast bought Everest Net’s operating licence. Similarly, Otel bought Zen Tech International’s permit. NTA officials said that even though small ISPs were finding it hard to keep their heads above water, the royalty collection next year would be even higher due to stiff competition mainly in the data segment.