This Tax News Flash dated 4 March 2024 explains an SRO that grants and withdraws income tax benefits for exporters under the Income Tax Act 2023 (ITA 2023). The benefits now apply to export of goods only.

Exporters of goods that hold a TIN and comply with ITA 2023 receive the following: individuals have 50% of export income exempted, other taxpayers pay tax at 12%, and exporters with LEED certification pay 10%. If an exporter is penalised for breaching environmental rules, the regular corporate tax rate applies instead.

Exporters using the 50% exemption or the 12% or 10% rate cannot use these benefits as the basis for obtaining a lower withholding tax certificate. For exporters of goods that enjoy a tax rate below 12% under another order or provision of ITA 2023, the SRO prescribes a separate mechanism under which a proportionate corporate tax rate applies, and NBR later clarified this in a separate notification. The SRO is effective up to 30 June 2028. The firm's comment highlights two points: only export of goods is covered, and a proportionate basis now determines both the applicable tax rate and the reduced withholding tax rate certificate.