Ncell Contributes Rs 144 Billion in Tax to Nepal in 5 Years

Private telecom giant Ncell Axiata contributed Nepal with a total of Rs 144 billion in tax and other fees in the last five years, the company recently published National Contribution Report shows.

The report also shows that in 2021 (Fiscal Year 077/78), the operator paid the Government of Nepal (GoN) Rs 21.75 billion in various taxes and fees. The amount accounted for 2.5% of the total government revenue for the year. The company contributed its highest in 2019 (FY 075/76) with Rs 34.56 billion, 4.4% of the total revenue of the same year.

Ncell as a key tax contributor to Nepal in the last 5 years

Meanwhile, Ncell paid Rs 26.86 billion in 2017 AD. The amount accounted for 4.9% of the total government revenue for the year. Similarly, the company paid Rs 28.23 billion and Rs 32.36 billion in 2018 AD and 2020 AD respectively. The growth trend though has fallen in recent years since the Covid-19 pandemic. We can see the stark distinction between the years 2019 and 2021 where the total amount nosedived by Rs 12.81 billion between them.

Years	Total tax contribution (in billion)	Total government revenue (%)
2017	Rs 26.86	4.9
2018	Rs 28.23	4.4
2019	Rs 34.56	4.4
2020	Rs 32.36	4.3
2021	Rs 21.75	2.5

Voice, data, and international calls are the main sources of income for telecom companies. But since Covid-19, Ncell like other service providers, lowered tariffs of its services, particularly data for connectivity. This, though, increased bandwidth consumption. inversely affected the profit. Besides, travel restrictions also drove down its profits from roaming services.

Also read: Ncell Reduces 3% TSC on Services From Shrawan 1st

Lowering growth trend post Covid-19

In the meantime, the company’s total Accumulated Capital Investment reached Rs 46.39 billion at the end of 2021. But the Capital Investment fell by 45% from Rs 10.98 billion to Rs 6.03 from 2019 to 2021. The slump was probably due to Covid-19 impacting the telco’s business. Ncell has likewise seen lower Average Revenue Per User (ARPU) in recent years, especially since the pandemic.

Ncell Capital Investment	Total amount (billion)
2019	Rs 10.98
2021	Rs 6.03

Besides, the company’s Gross Value Added (GVA) also dropped by 35.5 % from Rs 81.21 billion to Rs 52.37 in the past years. This represented a decrease in share from 3% to 1.4%. Ncell attributed the slump to lower operating profits and slow growth of mobile penetration. GVA is a vital indicator of a company’s contribution to the economy.

Ncell, like other telecom companies, pays the government under multiple headings. These include Telecom Service Charge (TSC), Value Added Tax (VAT), Ownership tax, royalties, RTDF, frequency, license renewal, etc.

Since its inception, the telco has paid the government Rs 263 billion in total taxes and other fees.

Check out: Top 10 Highest Tax-Paying Companies in FY 078/79

Ncell contributed to Nepal with Rs 1.65 billion under CSR projects

Ncell is also active with its Corporate Social Responsibility (CSR) initiatives. By the end of 2021, the company has contributed Rs 1.65 billion under CSR projects. Ncell has invested in education, health, and the environment assisting the government in realizing the Sustainable Development Goals (SDGs).  

Ncell’s latest CSR projects:

• Ncell Green Ring-Road Project
• Ncell Lainchaur Ground Rebuild Project

Likewise, Ncell has also played a significant role in employment generation for Nepal with 98% of employees being of Nepali nationality. The report shows the company supporting a total of 24,941 jobs in 2020/21. Out of the total, 538 jobs were directly created by the telco in 20/21 AD. Ncell says out of the total, 24% of its employees were female till the same period. Ncell recently opened an all-female service center in Maharajgunj in line with its women empowerment values.

During the same period, the telco’s operations indirectly supported 16,599 jobs meanwhile 7,804 jobs were supported by its capital investment.

Ncell is a leading telecom provider in Nepal providing affordable voice, data, and other telecom services. The operator has connected over 1.76 crore users across Nepal on its broadband networks – 3G, and 4G and occupies a nearly 40% market share in the telecom industry, as per NTA data.

Is Ncell contributing significantly to Nepal with its tax and CSR initiatives? You can offer your input in the comments.