Worldlink Being Investigated for Tax Evasion and Capital Flight

The Revenue Investigation Department and the Commission for the Investigation of Abuse of Authority (CIAA) have launched investigations into Nepal’s leading Internet service provider, Worldlink Communications, over allegations of tax evasion, capital flight, and operational irregularities.

Worldlink is under scrutiny for allegedly engaging in tax evasion and royalty fraud, particularly concerning its international transactions for purchasing bandwidth. The company’s payments for bandwidth, sourced from India, reportedly bypass legitimate channels by routing through intermediaries in Hong Kong, raising suspicions of capital flight.

While the average market rate for bandwidth services stands at $1.6 per unit, Worldlink is accused of overpaying at $3.3 per unit through these dubious intermediaries, exacerbating concerns about financial impropriety.

Furthermore, Worldlink faces allegations of operating television services without the requisite license. Instead of obtaining a direct license that mandates a 2% annual royalty payment, the company purportedly acquired a license from NetTV, a move that has not been properly utilized or financially accounted for.

Earlier, the Supreme Court of Nepal dismissed all eight writ petitions filed by Worldlink Communications against government regulations, including challenges to taxation on maintenance charges. A joint bench of Justices Hari Prasad Phuyal and Dr. Nahakul Subedi ruled against Worldlink’s claims, affirming government efforts to enforce tax compliance among telecommunication service providers.