Secured Advance
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Andrew
Thanks for your suggestion and agreed on this point that taking the 75% is the better deal for the Contractor than paying 1% withholding Tax.
Shahzad,
The sums arent too difficult to work out if an estimated cashflow has been compiled. Simply the value of the 1% tax versus the cost of the additional cashflow if the 75% is not paid.
I would guess - and it is only a guess not knowing the material proportion of the total project - that taking the 75% is the better deal.
In my view, payment against advance of 75 % of total material at Site is an advantage for the Contractor to smooth its cash flow despite the Contractor realizes that by claiming secured Advance in each month, he has to pay excessive withholding tax against this head. So Contractor should think about the benefits given by the Employer.
Expert opinion is still awaited