KATHMANDU: The government has initiated a process to resolve the long-standing dispute over unpaid telecommunications service charges, royalty payments, and Rural Telecommunications Development Fund (RTDF) contributions owed by internet service providers (ISPs).

In a bid to settle years of disagreements over outstanding dues, tax assessments, and license renewals, the Ministry of Communications and Information Technology has intensified consultations with stakeholders. During a recent meeting with officials of the Internet Service Providers’ Association of Nepal (ISPAN), Minister for Communications and Information Technology Dr. Bikram Timilsina made it clear that all payments required under the law would be collected.

Minister Timilsina said the government is open to reviewing tax or fee assessments if it is found that ISPs have been unfairly charged in violation of existing laws. However, he stressed that service providers cannot indefinitely avoid legal financial obligations.

“If any tax or fee has been imposed unfairly and contrary to the law, the government can review it. But payments that are legally due cannot remain unresolved forever,” Timilsina said. “The government will address legitimate concerns, but otherwise the process of recovering outstanding dues will move forward.”

The minister said the current fiscal year has been designated as a year of reform for Nepal’s telecommunications sector and pledged to address long-standing policy and administrative issues. He also urged service providers to submit their concerns and reform proposals to the ministry in writing.

License renewal linked to payment of dues
The Nepal Telecommunications Authority (NTA) has repeatedly maintained that internet service providers that fail to clear outstanding payments cannot have their licenses renewed. During the discussion, Timilsina reiterated that companies should not expect to continue operations or secure license renewals without fulfilling their legal financial obligations.

He also noted that the large number of internet and telecommunications service providers operating in Nepal has created challenges for effective regulation and oversight. In this context, he pointed to the possibility of mergers and acquisitions within the sector.

“Rather than having a large number of financially weak companies, it is more beneficial for both consumers and regulators to have a limited number of capable and financially strong service providers,” he said.

ISPs seek installment-based payment plan
Representatives of ISPAN told the minister that many service providers are facing financial pressure and would find it difficult to clear up to five years of accumulated dues in a single payment.
The association requested that the government allow royalty and RTDF liabilities to be paid in installments. According to ISPAN, delays in license renewals have affected network expansion, banking transactions, and overall business operations. The association warned that the financial condition of service providers could deteriorate further if the dispute remains unresolved.

ISPs have also called for a review of the telecommunications service charge (TSC) assessment process. They have further requested an opportunity for reassessment of tax determinations made by the Large Taxpayers Office, arguing that in some cases they are being required to pay taxes on revenue that was never actually collected from customers.

Billions in outstanding royalty and RTDF payments
Under existing laws, internet service providers are required to contribute 4 percent of their total revenue as royalty payments to the Ministry of Communications and Information Technology and an additional 2 percent to the Rural Telecommunications Development Fund through the Nepal Telecommunications Authority.

However, according to regulators, most service providers have failed to pay these obligations for years. The authority has repeatedly directed companies to deposit the required amounts, along with applicable fees, based on audited financial statements, but service providers have continued to challenge the assessments.

The Office of the Auditor General has also repeatedly highlighted unpaid royalty, RTDF contributions, and other fees owed by service providers in its annual reports, recommending that the government recover the outstanding amounts.

The latest round of discussions among the government, regulators, and service providers has raised hopes of resolving a dispute that has remained unsettled for years. However, significant challenges remain in balancing the demands of service providers with the government’s responsibility to collect legally mandated revenues.