Finance Minister AHM Mustafa Kamal, in his budget speech at the parliament today, proposed to reduce the rate of withholding tax on export.
Exports of goods and services, including that of RMG, have faced a downturn due to the outbreak of the Covid-19 pandemic.
He made the proposal to reduce the rate of withholding tax on export proceeds as a part of extending overall support to the export sector.
The existing rate of collecting withholding tax on all sorts of export proceeds including that of RMG as stipulated in the Income Tax Ordinance is 1 percent that has further been reduced through an SRO, which continues to be in force till 30th June 2020.
"I propose to amend the Ordinance to fix the rate of withholding tax on all sorts of export proceeds including that of RMG at 0.5 percent instead of the existing rate of 1 percent," the minister said.