Walmart Gets $1 Billion Tax Bill For PhonePe Shift To India: Report In July 2022, the digital payments firm PhonePe had revealed its plan to shift its headquarters from Singapore to India
By Teena Jose
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Walmart Inc. and other PhonePe shareholders will have to pay nearly $1 billion in tax after the digital payments company shifted its headquarters to India, according to a Bloomberg report citing sources familiar with the matter.
The bill stems from the relocation and rise in value of PhonePe Pvt Ltd, which Walmart took majority ownership post-acquisition of parent outfit Flipkart Online Services Pvt. Now separated from Flipkart and re-domiciled from Singapore to India, the fintech firm is raising funds at a $12 billion pre-money valuation from General Atlantic, Qatar Investment Authority and others, triggering the hefty charge, the people said, declining to be named discussing a private matter, as per the report.
In July 2022, the digital payments firm PhonePe had revealed its plan to shift its headquarters from Singapore to India. As per earlier reports, PhonePe, at the time was valued at $5.5 billion with a fundraise of $700 million and the e-commerce firm, Flipkart, continued to remain its biggest shareholdeR. It had reportedly crossed the 250 million registered user milestone, with more than 100 million monthly active users, generating nearly one million digital payment transactions in 2020.
Investors including Tiger Global Management have now purchased shares of PhonePe in India at the new price, leading to tax implications of roughly 80 billion rupees for existing shareholders, stated in the report citing one of the close sources.
In 2016, e-commerce platform Flipkart acquired PhonePe. As per company website, in 2020, PhonePe became the fastest growing insure-tech distributor with a sale of 5 lakh policies in 5 months and crossed the 250 million registered users mark, with a market-leading share of over 40 per cent in UPI transactions.
According to market insights, India has over 26,000 startups making it the world's third-largest startup ecosystem and at last count over 100 of these were valued at $1 billion, making them unicorns.
