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FBR starts payment of tax refunds directly to bank accounts

FBR starts payment of tax refunds directly to bank accounts

ISLAMABAD: Federal Board of Revenue (FBR) on Friday started payment of income tax refunds directly to the bank accounts of those taxpayers who have provided their IBAN.

FBR sources said that the FBR had received Rs10 billion from the finance division for the payment of income tax refunds. The FBR issued cumulative up to Rs5 million to a taxpayer.

The FBR explained term cumulative as the total amount of refund in respect of a taxpayer (for the tax year 2014 to 2019) duly processed and sanctioned under the law.

The release of income tax refunds is under Prime Minister’s relief package in order to reduce impact of the coronavirus on businesses.

Under the prime minister package an amount of Rs100 billion has been allocated for the payment of claims under sales tax, income tax and duty drawback.

FBR sources said that so far around Rs58 billion, including income tax refunds, had been disbursed to the claimants.

The business community was not happy with the decision to put restriction on disbursement of income tax refunds.

It is most unfortunate and disappointing to know that FBR has put ceiling of Rs. 5 million (cumulative of 5 years).

This has closed the access to even those business entities which have cumulated tax refunds of even one rupee more than Rs. 5 million in 5 years from 2014-15 to 2018-19income tax refunds.

Nisar said that the said ceiling instructions issued by FBR is discriminatory and strongly asked Finance Ministry to instruct for releasing of at least Rs. 5 million income tax refunds to all businessmen regardless of level of their income tax refunds accumulation in the last 5 years.

He said that the apex body is of the view that Ministry of Finance should also consider to release half of the accumulated income tax refunds to help in economic revival exercise under taken by the government.