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NBR tightens source tax benefits for certain exporters

BTJ Desk Report
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NBR tightens source tax benefits for certain exporters

The National Board of Revenue (NBR) issued a new circular clarifying its earlier circular from 4th March, which allowed certain exporters with corporate tax rates below 12% to pay source tax below 1%. The clarification instructs exporters to obtain new tax certificates and directs banks to collect taxes at a new rate, although the exact rate remains unspecified. This new directive is expected to result in increased source tax for some exporters. The 4th March circular aimed to enable exporters with corporate tax rates at or below 12% to pay source tax at a lower rate than the existing 1%.

However, certain sectors or institutions may face higher tax rates according to tax officials. The changes suggest potential additional taxation for certain export sectors starting from the specified date. Currently, most exporters pay source tax at a 1% rate.

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