ISLAMABAD, May 19: The government is considering two proposals to reduce the rate of withholding tax on imports and supplies in the next budget.

Informed sources told Dawn on Friday that the budget-makers were working on various proposals for encouraging corporatisation in the country.

The sources said that a proposal was under consideration to bring down the rate of withholding tax on imports from six per cent to three per cent for both commercial importers and local manufacturers.

It was also under consideration to lower the rate of withholding tax from 3.5 per cent to 1.5 per cent on supplies to give relief particularly to the corporate sector, they added.

The sources said that it was likely that the limit of small companies might also be extended to those companies listed last years on stock exchanges.

The government was also proposed to reduce the rate of income tax from 35 to 30 per cent for public companies, and from 37 per cent to 35 per cent for private companies. The rate for a banking company was proposed to be brought down from 38 per cent to 35 per cent, added the sources.