ISLAMABAD: As truly democratic regime, the PML (N) led government has come forward for resolving the problems of exporters who are facing difficulties in obtaining stuck up refunds in the current fiscal year. This issue was raised in this media outlet last week by highlighting the issue of refunds that had choked the ability of the businessmen in gravest manner. Last week, Finance Minister Ishaq Dar ordered the FBR to clear backlog where all procedures and clearance is in place. The stuck up refunds came on the surface mainly in those areas where manual tax returns were filed.
Those taxpayers who filed their refunds through electronic filing (Expeditious Refund System) they were not facing major difficulties in getting their refunds. But those taxpayers who are filing claims through manual system the FBR was facing teething problems for verifying the processing of data, causing undue delay in repayment of refunds. Pakistan’s Tax to GDP ratio stood at 8.5% in last fiscal year and the government intended to increase to 13 percent over the next five years by enhancing growth one percent every year. According to Finance Minister, in order to ameliorate the problems of Small & Medium entrepreneurs we have decided that their sales tax refunds must be paid immediately.
While appreciating the queue that has been established for sales tax refund, it will make this one time exception to facilitate the SME sector. Finance Minister directed FBR for Sales Tax refunds up to Rs.0.5 million, within 3 weeks and refunds from Rs. 0.5-1 million will be cleared by 15.4.2014 subject to verification and due process. This step will alone benefit around 26,000 clients of the total 36,000 refund cases and the remaining large sum claims will be processed through queue system separately. The Finance minister instructed the Chief Commissioners for putting in more efforts in order to develop Pakistan and make Pakistan prosperous in line with the vision of the Prime Minister.
The FBR was facing difficulties for achieving almost impossible tax target of Rs 2,475 billion. The IMF had already projected that the FBR’s collection would be standing at Rs 2,345 billion maximum but it was yet to see that how the government managed its efforts to boost revenues. It seems that the government will continue to rely upon non tax revenues as major source to bridge the gap of FBR’s tax shortfall in the current fiscal year in order to avoid slippages on fiscal front.