Walmart Says It Paid Most of $1 Billion Tax to Shift PhonePe Base to India

Walmart late on Wednesday confirmed that it had already paid the Indian government most of the nearly $1 billion (roughly Rs. 8,300 crore) in tax owed after digital payments company PhonePe, which the US retailer owns through Flipkart, shifted its headquarters from Singapore to India.

Walmart bought a controlling stake in Indian e-commerce giant Flipkart in 2018, giving it ownership of PhonePe. The company said last month it had completed the separation of PhonePe from Flipkart, adding that it would remain a majority stakeholder in both the companies.

“Walmart has already paid most of the Rs. 7,800 crore billion that was incurred as a capital gains tax after PhonePe investors sold their stake in the Singapore entity and invested in the Indian entity following the domicile change,” a source with direct knowledge of the matter had told Reuters.

Tiger Global, an existing PhonePe investor, was not required to pay the tax, according to the source.

Walmart did not give any other details on the payment. PhonePe did not immediately respond to a Reuters email seeking comments on Thursday.

Moneycontrol reported last year PhonePe was raising funds at a $12 billion (roughly Rs. 99,300 crore) valuation in a round led by General Atlantic. The fintech firm was last valued at about $5.5 billion (roughly Rs. 45,500) in December 2020.

Bloomberg News previously reported that Walmart and other PhonePe investors would have to pay nearly $1 billion (roughly Rs. 8,300 crore) after its domicile change.

Back in December, it was reported that Flipkart and PhonePe had completed their separation and both entities would continue to operate under Walmart.

“As part of this transaction, existing Flipkart Singapore and PhonePe Singapore shareholders, led by Walmart, have purchased shares directly in PhonePe India. This completes the move to make PhonePe a fully India-domiciled company, a process that started earlier this year,” the company said in a statement at the time.

© Thomson Reuters 2023