The government is taking steps to resolve the long-pending dispute regarding outstanding dues and license renewals of internet service providers in Nepal.
The government has started a process to solve the years-long dispute regarding Telecommunication Service Charge (TSC), royalty, and Rural Telecommunication Development Fund (RTDF) owed by internet service providers (ISPs). To resolve these old issues related to tax determination, dues recovery, and license renewal, the Ministry of Information and Communications has speeded up discussions with stakeholders.
During a meeting on Wednesday, the Minister for Information and Communication, Dr. Bikram Timilsina, talked with the representatives of Internet Service Providers Association of Nepal (ISPAN). He clearly stated that taxes and fees which is legally required to pay must be collected by government under any situation.
Government’s Stance on Taxes and Reforms
Minister Timilsina said that if taxes or fees were determined against the existing laws in a way that is unfair to the ISPs, the government is ready to review them. However, he clarified that legally required money cannot be kept pending forever. If there are genuine problems, the government will address them, otherwise the recovery process will go ahead.
The Communication Minister also mentioned that the government is celebrating this fiscal year as the year of telecommunication sector reform. He promised to solve policy and administrative problems that have been pending for years. He also requested ISPAN to submit written suggestions regarding the problems they are facing and the reforms they expect from government.
The License Renewal and Merger Options
Nepal Telecommunications Authority (NTA) has been holding a strong position that ISP licenses will not be renewed until they pay their outstanding dues. Minister Timilsina supported this, saying that service providers cannot expect to run services and renew licenses without paying what they legally owe.
He also pointed out that Nepal has a very high number of internet and telecom providers, which makes effective regulation and monitoring difficult. He suggested that going for merger or acquisition could be a good option. Having a limited number of strong and financially stable companies is much better for both customers and regulators than running many weak companies.
ISPs Demand for Installment Payments
On the other hand, ISPAN representatives said that service providers are under heavy financial pressure. They said it is not possible to pay five years of accumulated dues all at once. They requested the government to allow them to make payments in installments, especially for the royalty and RTDF dues.
According to ISPAN, many companies have landed in deeper trouble after NTA stopped renewing their licenses. This halt in license renewal has badly affected their service expansion, banking transactions, and daily business operations.
The association has also demanded a review on the determination of TSC and asked for a chance to do reassessment of taxes through the Large Taxpayers Office. During the discussion, service providers complained that they are being forced to pay tax even on the amount they did not collect from their customers.
Currently, most ISPs have to pay 4 percent royalty of their total income to the Ministry of Communication and 2 percent of total income to the Rural Telecommunication Development Fund through NTA, apart from the regular taxes to the Inland Revenue Office. Although NTA has issued multiple circulars to clear these dues based on audited financial statements along with extra charges, the ISPs have not paid yet. The Office of the Auditor General has also highlighted these unpaid dues as beruju in its annual reports and requested the government to recover them.
AI Disclaimer: This article was originally published on https://bajarkochirfar.com. It has been translated with the help of AI. For the best understanding and accurate facts, we recommend reading the original Nepali version.
