The Government has delayed the introduction of a bill to increase withholding tax for non-resident investors in managed investments.Assistant Treasurer David Bradbury announced yesterday that the proposed change, which would see the withholding tax rate increase from 7.5 per cent to 15 per cent, would be considered in a separate bill. It was to have been included with a group of Budget tax measures in a bill tabled this week.According to a report in The Australian, the withholding tax measure was withdrawn after objections from the Greens, who want the Government to stick to the lower rate and encourage more foreign investment in the local managed funds industry.Last year, the Government postponed planned changes to interest withholding tax for non-residents with Australian bank deposits. The rate was scheduled to drop from 10 per cent to five per cent in the 2012/13 financial year and then be phased out altogether.The Government's latest plan is to start this process in the 2014/15 financial year.These reductions in withholding tax rates were part of the Government's plan to encourage the development of Australia as a regional financial centre.A spokesman from an industry body said foreign investors could only assume that the Government has no commitment to this policy.