On Wednesday, American retailing giant Walmart said that the company has already paid up a major portion of the 1 billion dollar tax owed to the Indian government. Walmart, the parent company of PhonePe, and other investors were supposed to pay the Indian government 1 billion dollars as capital gains taxes as PhonePe decided to change domicile from Singapore to India.
As part of repositioning the domicile, investors of PhonePe sold their stake in the Singapore entity and invested the proceeds in the Indian entity. The sale of a stake in Singapore and its following investment in India makes the owners liable to pay taxes on capital gains.
Individuals who have direct knowledge regarding the development tool Reuters that Walmart paid most of the 78 billion rupees. A spokesperson of PhonePe also informed news agencies through a statement that Walmart and other investors of the company have paid capital gains tax bills as it was the right long-term strategy.
PhonePe announced in mid-2022 that it will be shifting its headquarters to India from Singapore. When Walmart acquired Flipkart, it announced that the e-commerce company and PhonePe will become two distinct entities.
PhonePe which was founded in 2015 as a digital and phone payments system company, was acquired by the Indian e-commerce company Flipkart in 2016. Walmart became the parent company of PhonePe when the multinational retailer acquired Flipkart in 2018.
PhonePe is also raising additional capital with a 12 billion dollar pre-money valuation from investors such as General Atlantic and Qatar Investment Authority,
With more than 35 crore users and a revenue of 1600 crore rupees, PhonePe is one of the largest digital payments companies in India.
In 2022, PhonePe made two major acquisitions for nearly 75 million dollars. Wealth Management fund Wealth Desk was acquired for 50 million dollars while OpenQ, a wealth management platform was acquired for 25 million dollars. The fintech company executed these acquisitions in order to expand the digital payment services offered by the company.
