It’s been a year since the Supreme Court has summoned Ncell to pay tax. Ncell’s tax evasion is regarded as one of the biggest financial frauds that ever happened in Nepal. However, another multinational company, Coca-Cola, is now investigated under possible tax evasion.
On December 12, the Department of Revenue Investigation (DRI) seized official documents, hard drives, and files from Bottlers Nepal Limited’s office. The DRI officials entered Bottler Nepal’s premises at 1:30 pm and searched documents for two hours.
A senior officer said, “Now we have only nine months remaining to prove them guilty. The situation is critical for us.” According to a source, Coca-Cola Southwest Asia Holdings Limited – a major investor of Bottlers Nepal – sold their capital to different bottling companies. And they didn’t notify the government to evade tax.
Coca-Cola in a Bottle.
The Coca-Cola Company, operating in Nepal, hasn’t paid taxes worth billions. It’s estimated, they haven’t paid more than 11 billion Nepali Rupees to Nepal Government.
How did The Tax Evasion happen?
Bottlers Nepal Company is a registered company in Nepal. In this company, Coca-Cola South West holds 76.17 percent shares, Gorkha Brewery holds 12 percent, and the remaining 1.84 percent is for the public.
Coca-Cola South West is related to Gutsche Family, which is an investment company operating from South Africa. The company sold its shares to the Coca-Cola Company Atlanta six years ago.
Share Capital in Bottlers Nepal.
However, the shares weren’t sold in Nepal. The deal was signed outside Nepal. But, in the company register office, Nepal, there was no upgrade of the information. Coca-Cola’s major shareholders changed in reality – not in the documents. It plays an important role in tax evasion.
According to Nepali law, the company should pay 25 percent as capital gains tax despite changing the shareholders. Bottlers Nepal Company has neither informed the change in their company nor have they shown interest to pay the capital gains tax.
Bottlers Nepal’s plant in Balaju.
The government has also failed to investigate this issue. The Department of Revenue Investigation should have paid attention six years ago. Last year, the supreme court ordered Ncell to pay the capital gain taxes even though its shares were sold outside Nepal. So, in Bottler Nepal’s case, the same hearing might apply.
Bottler Nepal Company should pay 4 billion Rupees as capital gains tax. Also, they have to pay 60 crores as annual interest. The investigation officers said that by adding interest, capital gains tax, the company owes 11 Billion Rupees to Nepal Government.
Coca-Cola, World’s Largest Beverage Company
Coca-Cola has currently ranked the world’s largest beverage company. Coca-Cola is present in more than 200 countries. It has a market value of $182.9 billion. Coca-Cola is also involved in producing various food brands.
Coca-Cola in the processing plant.
Coca-Cola is the world’s biggest polluter. The company has remained in the first spot for three years. Its plastic bottles have created much more pollution than any other thing on the planet.
According to research by the Changing Markets Foundation, Coca-Cola remains the biggest plastic polluter globally, with a plastic footprint of 2.9 million tonnes per year.
Coca-Cola entered in Nepali market in 1976. At first, the beverage was imported from India to Nepal. However, the local production was started in 1979 by Bottlers Nepal Company. Currently, two Coca-Cola factories are operating in Nepal. The oldest one is situated in Balaju, Kathmandu, and another is in Bharatpur, Chitwan.
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