DRI investigation finds Coca Cola evaded capital gains tax, recommends action against 15 executives – myRepublica

KATHMANDU, December 27: The Department of Tax Investigations (DRI), seeking to take action against Bottlers Nepal for revenue leakage, on Sunday submitted its final investigation report to the Public Prosecutor’s Office (PPO).

The tax investigation authority has stepped up action against the Coca-Cola maker in Nepal after it failed to get satisfactory clarifications from relevant officials, according to a DRI official. Giving a seven-day deadline which ended last Thursday by way of public notice, the DRI had asked the executives concerned to come to the Ministry for clarification, if necessary.

The tax investigation body has issued a cautionary notice against 15 leaders of Bottlers Nepal. Among them is company chairman Shukla Wassan, an Indian citizen from Gurgaon, India. “However, the department did not receive any concrete response from senior company officials within the timeframe,” a DRI source said.

The DRI in its final report recommended taking action against Bottlers Nepal for evading capital gains tax. Earlier in August, the PPO returned the investigative document to DRI asking it to conduct a further investigation into the company’s revenue leakage issue.

Bottlers Nepal was accused of evading capital gains tax when transferring the promoters’ shares to a foreign stakeholder some six years ago. Coca Cola Southwest Asia Holdings Limited, a major investor in Bottlers Nepal, had sold a large portion of its stake in the Nepal-based company to Bottling Investments Group. But the company did not officially notify the relevant government authority in Nepal in an apparent attempt to evade tax.

The Auditor General’s Office, in its 58th annual report, also mentioned that the government should recover 2.50 billion rupees in capital gains tax from the multinational.

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