ISLAMABAD: The Federal Board of Revenue (FBR) has been directed to pay income tax refunds up to Rs50 million within one week.
A meeting was held in FBR Islamabad to take stock of the issuance of refunds under the Inland Revenue Courts i.e. income tax, sales tax and federal excise duty.
Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh presided over the meeting, which was also attended by Industries and Production Minister Muhammad Hammad Azhar, Parliamentary Affairs Minister Azam Khan Swati, Adviser to PM on Commerce Abdul Razak Dawood, MNA Faizullah Kanika, Finance Secretary Naveed Kamran Baloch and FBR Chairman Muhammad Javed Ghani.
Dr Muhammad Ashfaq Ahmed, Member (IR-Operations) on the occasion made a presentation on the issue of refunds. The meeting was informed that a total of Rs142 billion of sales tax refunds were pending and Rs90 billion of income tax refunds were due for payment.
The member also informed that the export sector had been prioritized and an unprecedented amount of Rs106 billion had been released to them. It was also explained that during 2020, fresh inflows and refund claims had matched the outflows and a total amount of refund released under the head sales tax was Rs154 billion.
In order to further facilitate the business community and to resolve their day to day issues on priority, it was advised that a technical committee having representatives of the business community be formed to examine and resolve faster refund related issues.
It was also decided that there will be facilitation committees at field office level so that businessmen are able to have their issues resolved at the local level. It was also decided that a complaint cell be constituted where businessmen lodge their complaints and the complaint cell may pursue the complaints about resolution.
FBR was also advised to increase its public outreach and hold frequent meetings/media conferences and video conferences with trade associations to hear their viewpoint and issues relating to tax matters. It was noted that the withholding tax regime increased the cost of doing business and FBR was advised to examine reducing the regime in the coming budget.
Similarly, legal provisions relating to capping input tax adjustment at 90pc of payable tax in terms of section 8B of the Sales Tax Act were also proposed to be examined in the forthcoming budget exercise.
Discussing the tax refunds, FBR was advised to focus on pending refunds of both export and non-export sectors to ensure easy cash flows in the post-Covid scenario.
In order to ensure steady disbursement of refunds, it was also proposed that FBR may examine creating a ‘refund fund’ from where income tax refunds of previous years may be paid in routine till the time all the pending refunds are liquidated. In juxtaposition to speedy regular disbursal of refunds with faster running in automated mode, the importance of post refund audit to counter menace of flying invoices was proposed.
FBR’s efforts on zero tolerance against corruption were appreciated and FBR was advised to highlight its good initiatives, including fight against corruption, on media as well as on its websites.