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APRIL 26, 2020 PRINT EDITION
Business

FBR urged to release verified income tax refunds before Eid

The manufactures have urged the Federal Board of Revenue (FBR) to release their verified income tax refunds before Eid providing them much needed cash liquidity to meet their pressing expenses especially those pertaining to staff salaries/wages.

May 19, 2020

The manufactures have urged the Federal Board of Revenue (FBR) to release their verified income tax refunds before Eid providing them much needed cash liquidity to meet their pressing expenses especially those pertaining to staff salaries/wages.
Ministry of Finance in its press release of 16 April 2020 while highlighting the relief measures for the trade and industry had announced that income tax refunds of Rs.50 billion stacked up since 2014 will be released within a week. To implement the government decision the FBR issued directions to the Chief Commissioners across the country to send list of verified refund claims along with IBAN numbers of the refund claimants so that refund amount is transferred by the FBR directly in their bank accounts.
When contacted Shahid Jami, Tax Expert explained the actual situation and the legal position thereof. According to it reportedly FBR allocated refund amount of Rs.50 billion to various LTU/RTO and asked them to verify from FBR online data the tax payments/deductions where refund applications filed online are pending and to provide the lists to the FBR within their quota amount.
Reportedly first batch of list were sent to the FBR three weeks ago but the FBR has not released the refund amount which was promised within a week. Whereas field formation due lock-down are slowing working on the remaining cases.
Jami stated that apart from delay in release of refund amounts by FBR there is no rationale and legal basis to process refund claims from 2014 onward instead refunds of earlier years should have been given priority as tax payments of prior years are instantly verifiable from PRAL and Customs data.
He also observed that mechanism of issuance of refund amount by the FBR instead of concerned Commissioner as provided under section 170(3)(c ) has no sanction of law rather is reflection of unnecessary control of FBR in release of refunds at its discretion in the wake of poor tax collections due to recent pandemic.
Jami urged that tax collection targets be reduced to the extent of income tax refunds issued so that there are no hurdles in the processing and issuance of remaining refund claims rather it is imperative that entire backlog is cleared as was once done earlier in 1999.

Copyright Business Recorder, 2020