FBR told to release Rs270 million refund after six year delay

The Senate Finance Committee ordered the Federal Board of Revenue to release more than Rs270 million in tax refunds

Islamabad: The Senate Finance Committee ordered the Federal Board of Revenue to release more than Rs270 million in tax refunds claimed by a chemical company after the money remained pending for six years.

The issue was discussed during a meeting of the Senate Standing Committee on Finance and Revenue chaired by Senator Saleem Mandviwalla.

Representatives of the affected chemical company told the committee that more than Rs270 million in income tax refunds had remained unpaid for the last six years.

The committee said such delays hurt businesses’ cash flow and directed the FBR to resolve the matter. FBR officials assured the committee that the refunds would be released within one month and ordered that a report on the action be submitted within 30 days.

Senator Saleem Mandviwalla said the new FBR refund system was designed to process refunds within 72 hours.

Senator Muhammad Talha Mahmood called for a more taxpayer friendly FBR and sought details of tax refunds issued during the last five years.

FBR officials told the committee that a new system had been introduced to reduce human discretion in the refund process. Under the new system, refunds are being issued in sequence through the system.

The FBR also informed the committee that around Rs197 billion in tax refunds had been issued during the first two months of the current fiscal year, compared with Rs157 billion during the same period of the previous fiscal year.

This represented an increase of about Rs40 billion over the same period last year.

The officials further told the committee that under an IMF related condition, the FBR cannot retain refunds above Rs390 billion and therefore refunds cannot be held for a long period.

Senator Muhammad Abdul Qadir said that when a taxpayer receives a refund after two years, it indicates that the refund was genuinely due. He called for action against officials responsible for unnecessary delays in releasing taxpayers’ money.

The committee’s discussion put the FBR refund system under renewed scrutiny, particularly over the time taken to return money to taxpayers and the need to ensure that legitimate refunds are processed without unnecessary delay.