Internet disruptions across Nepal have escalated, leaving businesses, students, and ordinary citizens cut off from essential online services. The situation stems from a long-standing financial dispute between the Nepali government and Internet Service Providers (ISPs) regarding outstanding tax liabilities.
Conflict Over “Non-Telecommunications” Services
At the heart of the issue lies a disagreement over taxation regulations for ISPs. The government maintains that ISPs should settle taxes related to a wider range of services, including web hosting, data centers, and other “non-telecommunications” offerings. ISPs, on the other hand, argue that these services fall outside their core business scope and should not be taxed accordingly.
This dispute has been simmering for years and has come to a head in recent weeks. The Office of the Auditor General issued a report pressing the government to enforce its tax demands, leading to the current stalemate and service interruptions.
Impact of the Disruptions
The consequences of the disrupted internet services are widespread. Businesses reliant on online transactions are facing significant losses. Educational institutions that shifted to remote learning during the pandemic are now finding their activities stalled. Importantly, communication channels for many Nepalis have been severed, hindering everything from social connections to vital information access.
The Ministry of Communication and Information Technology (MoCIT) has issued a strong statement urging ISPs to prioritize addressing their tax obligations: “The disruption in internet services is entirely due to the ISPs’ failure to comply with their legal financial responsibilities. “This situation is severely impacting the public, and it cannot be allowed to continue.”
ISPs Point to Foreign Exchange Issues
ISPs claim that delays in obtaining foreign currency to pay international bandwidth providers have further complicated the situation. They allege that the Nepal Rastra Bank (the central bank) has been stalling the necessary approvals, adding to the payment bottlenecks.
The government has refuted these claims, placing the blame squarely on the ISPs.
Looming Threat of Further Disruption
As the conflict drags on, there are growing concerns that internet shutdowns could become more frequent and severe. The Nepali government has warned that if ISPs continue to stall on their tax responsibilities, further action, potentially including service suspension, could be considered.
Public Outcry and Calls for Resolution
Frustrations among Nepali citizens are mounting. Social media platforms have become flooded with complaints, and there’s a growing sense of urgency for a swift resolution to the crisis. Business associations and civil society groups are pushing both the government and the ISPs to come to a commitment that prioritizes restoring reliable internet connectivity for all.
