DRI pursues legal action against Cotiviti Nepal Pvt Ltd for alleged revenue leakage

KATHMANDU:  In a significant move, the Department of Revenue Investigation (DRI) has taken legal action against Cotiviti Nepal Pvt Ltd, accusing the company of revenue leakage totaling a staggering Rs 10.36 billion. This landmark case marks one of the largest amounts ever pursued by the department against a single business entity in Nepal.

Nawa Raj Dhungana, Director General of the DRI, revealed that the investigation unearthed substantial evidence pointing towards tax evasion and misconduct by the Nepali subsidiary of Cotiviti Inc, USA.

The company, which operates in the information technology sector as a foreign direct investment entity, stands accused of evading income tax and value-added tax, amounting to Rs 5.18 billion.

The gravity of the allegations is underscored by the additional fine imposed on Cotiviti Nepal, equivalent to the evaded tax amount. This punitive measure reflects the severity with which the authorities are addressing instances of financial impropriety and underscores their commitment to upholding fiscal integrity.

The case against Cotiviti Nepal has raised concerns within both the business community and regulatory bodies, highlighting the need for stringent oversight and compliance measures to prevent similar occurrences in the future.

As a foreign-owned company operating within Nepal’s borders, Cotiviti Nepal’s alleged actions have drawn scrutiny not only for their potential financial ramifications but also for their implications on the country’s investment climate and regulatory environment.

The unfolding investigation serves as a reminder of the critical role played by regulatory agencies in safeguarding the country’s fiscal health and ensuring a level playing field for all businesses.

With the DRI taking proactive steps to address instances of revenue leakage and tax evasion, stakeholders are hopeful that this case will serve as a deterrent to others who may contemplate similar malpractices.

Efforts to recover the substantial amount owed by Cotiviti Nepal underscore the government’s commitment to enforcing tax compliance and preserving the integrity of the nation’s financial system.

As the legal proceedings unfold, all eyes will be on the outcome of this high-profile case, which carries significant implications for Nepal’s business landscape and regulatory framework.