According to the National Board of Revenue (NBR), the reduced tax at source for the export-oriented RMG industries has become effective from January 3 this year. The revenue board issued the order to clarify the date actually when the reduced tax would be effective.
The Tax Administration at the very beginning of the year issued a Statutory Regulatory Order (SRO) reducing the tax at source at 0.25% for the hundred% export-oriented RMG industries, BSS reported.
However, the circular did not clarify from when this reduced rate of tax at source would become effective, causing confusion. In this regard, the revenue board issued the order clarifying that the reduced rate of tax at source would become effective from January 3.
A senior official of the income tax department said, “Since the banks wanted to know from us from when the reduced rate would become effective, we’ve verbally informed them to make effective this rate from January 3. We’ll issue letters in this regard to the banks concerned very soon.”
Earlier on January 3 this year, the tax at source in the export-oriented RMG sector was reduced at 0.25% from the previous 0.6% in a bid to enhancing the competitive edge of the RMG sector.
With the latest reduction, the tax at source for exports in the RMG sector has been reduced for the 2nd time in the current fiscal year. The tax at source for exports in the RMG was reduced at 0.6% from 1.0% earlier on September 5 last year.