Company source tax on securities income raised to 15%
An ordinance in this regard was published yesterday (6 October).
The interim government has increased the source tax on interest, profit, or other income earned by companies from government and other securities from 10% to 15%.
An ordinance in this regard was published yesterday (6 October).
Previously, the rate was 10% for all taxpayers, including companies.
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However, the new rate will now apply only to companies, while the previous rate remains unchanged for individual or non-corporate taxpayers.
Experts said the hike will reduce companies' working capital.
Speaking to The Business Standard, Snehasish Barua, managing partner of SMAC Advisory Services Limited and a tax expert, said, "The tax rate on securities income for companies is already 27.5%.
"They eventually pay that rate at year-end, but the upfront source deduction reduces available cash flow. Increasing this source tax will further strain liquidity."
