KATHMANDU: Internet service providers (ISPs) in Nepal are awaiting the full text of the Supreme Court's ruling regarding the taxes they collected from the public. Since the fiscal year 2017-18, ISPs have collected nearly Rs4 billion in rural telecommunications development fees and royalty charges on maintenance but have not transferred the amount to the government. The ISPs argue that a former parliamentary Public Accounts Committee had ordered the fees to be waived.
The Supreme Court recently scrapped a writ petition filed by Worldlink Communications, instructing ISPs to pay the government taxes they had collected from the public. Binay Bohra, owner of the Vianet internet service provider, stated that they will comply with the court's verdict and are discussing with the Nepal Telecommunications Authority on the owed amount and payment modalities.
The dispute between ISPs and the government has led to disruptions in services, as seen when the Indian vendor providing around 70 percent of upstream services to Nepal severed the link due to the payment dispute. Airtel, the telecom provider, restored services after assurances from the Nepal Telecommunications Authority to resolve the payment issue responsibly.
The Ministry of Communication and Information Technology has reiterated that unless ISPs pay the due taxes, foreign exchange recommended by the Nepal Rastra Bank for payment to upstream service providers will not be available. Despite a past order exempting ISPs from certain taxes, the auditor general highlighted that fees collected from the public should not be waived, leading the government to request recovery of charges from ISPs.
Nepali ISPs owe Airtel over $30 million (Rs4.3 billion) for upstream services, with outstanding payments dating back a year. The issue remains unresolved, impacting the ISPs' operations and affecting millions of internet users in Nepal. The ISPs emphasize their contribution to the economy, providing direct employment to over 15,000 people in the country.
