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Lesson Learned from Ncell Case : CA. Analraj Bhattarai

Lesson learned from the Ncell case, Nepalese tax system is not mature and had not been properly synchronized with international development. Thanks Ncell for choosing simple way to solve the issue by depositing tax, though the burden of payment rest solely on the seller (for example, we can't make any listed companies liable for paying capital gains tax as a result of shares transfer in Stock Market). 

Now, Tax authorities have legal basis to recover capital gain tax from listed companies for stock market transactions and if they choose to do that, then it could be a serious step leading to catastrophe in the system.

Ncell had could have taken legal recourse in our infant judiciary system, could have got decision on it's favour, but by depositing tax to government treasury Ncell had shown commitment towards Nation.

Now government of Nepal should immediately introduce legal provisioning to bring all offshore transitions involving business in Nepal into tax bracket. We have to wait and see how government will respond to this issue in the upcoming budget, and how many will clauses be amended or introduce to bring such offshore transactions into the tax net.