Business

Taxpayer refunds: FBR rejects tax ombudsman report

Stresses finance minister is not controlling refund payments

Our Correspondent June 21, 2016

Federal Board of Revenue. PHOTO: AFP

ISLAMABAD: The government has rebuked a claim made by the Federal Tax Ombudsman (FTO) office that Finance Minister Ishaq Dar was controlling the release of refunds and has insisted that payment of refunds is purely a technical and administrative issue.

“The Federal Board of Revenue (FBR) takes a strong exception to the attempt to give a political tinge to the matter of payable refunds, which is a purely technical and administrative issue,” said a statement issued by the tax-collecting agency.

This comes after an FTO report observed that Dar was directly controlling the release of taxpayer refunds with an aim to inflate revenue collection. “Approval to issue the refund cheques is being obtained from the finance minister,” the report said.

However, the FBR claimed that there was “no evidence to support the allegation that refunds are being withheld to artificially inflate collections of the FBR.”

Contrary to this claim, the FBR’s Jan-Mar review report shows a huge reduction in refund payments. “During January-March 2015-16, 33% lesser refunds have been paid compared to the corresponding period of last year,” showed the report.

Only Rs60.3 billion worth of refunds were cleared in Jan-Mar this year compared with Rs90 billion in the comparative period of previous year.

The FBR insisted in its statement that if the finance minister was controlling the refunds, he would not have announced zero-rated status for the five export-oriented sectors in his budget speech for the next financial year.

It said the minister had also announced that all refund cases of exporters where refund payment orders had been processed by April 30 would be cleared by August 31, 2016.

“The FBR is performing its role as the premier revenue collecting agency of the country without any interference by the finance ministry,” it added.

Published in The Express Tribune, June 21^st, 2016.

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COMMENTS (2)

Haseeb Khan | 8 years ago | Reply FBR is responsible for withholding the due refunds of the taxpayers to cover up their inefficiency of failing to collect due taxes. FBR has become a Withholding tax organisation as over 75% taxes are collected through withholding taxes.Unless FBR is very urgently reformed,the country will not get legitimate taxes that are due. The cause of the problem is FBR administration as if proper taxes would have been collected there would not have been any reason to withhold due refunds of citizens.

H.A.Khan | 8 years ago | Reply Every one knows that FBR is inflating the tax collection numbers by withholding Sales Tax and Income Tax refunds. According to the business circles the figure of Sales Tax and Income Tax refunds withheld has now swelled to about Rs 280 Billion. This withholding of refunds has caused serious dent in the exports as the cash flow of the export oriented companies was badly affected due to withheld refunds. There is a serious need to reform FBR which has become inefficient organisation and now an organisation that has lost trust of the citizens.

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