Blocked tax refunds: FTO comes under pressure, removes report from website

Claims it was the opinion of an individual and was not the finding of report

Shahbaz Rana July 04, 2016
The report said tax authorities were showing gross collection of taxes whereas it should actually be net collection after deducting the amount of refunds. PHOTO: FILE

ISLAMABAD: The Federal Tax Ombudsman (FTO) office has distanced itself from the allegation of blocking taxpayer refunds against Finance Minister Ishaq Dar in a report it commissioned to investigate the delay in clearing the refunds.

“The reference made to the finance minister or inflated revenues through blocking refunds was an unsubstantiated opinion of one of the participants and not the finding of the report,” said FTO Secretariat Chief Coordinator and official spokesman Abdul Khaliq.

However, the main page of the report on “Delay in sales tax refunds, problems and issues” carries the logo of FTO office, which initially put the report on its website, apparently taking ownership.

It later removed the report from the website when the finance minister expressed his annoyance over the allegation.

The FTO spokesman did not comment as to why the FTO office removed the report and whether there was any pressure from the finance minister’s office.

Khaliq also did not respond to the question about challenges faced by the FTO office after the finance ministry put pressure to withdraw the report.

Contrary to his claim that the allegation against the finance minister was only one person’s opinion, the report did not carry any disclaimer.

The FTO had constituted a seven-member committee, headed by Supreme Court Advocate Dr Ikramul Haq, on a complaint of Pakistan Apparel Forum Chairman Javed Bilwani about delay in the issuance of tax refund cheques by the Federal Board of Revenue (FBR).

“Everything is written in the report and nobody can deny the fact,” said Bilwani while commenting on the FTO’s backtracking.

Blocking taxpayer refunds has become a chronic issue with fresh allegations emerging that the FBR has blocked over Rs250 billion in addition to taking over Rs150 billion in undue advances as part of efforts to achieve last fiscal year’s Rs3.104 trillion tax collection target.

“The delay in payment of refund claims is a political matter and it isbeing dealt with by the finance minister and the prime minister,” said Karachi Chamber of Commerce and Industry’s (KCCI) GST and Refund Sub-committee Chairman Shoaib Ahmad Faridi.

The report said tax authorities were showing gross collection of taxes whereas it should actually be net collection after deducting the amount of refunds. The approval to issue refund cheques was obtained from the finance minister, the report added.

But the FTO spokesman said, “the office highly appreciated finance minister’s concern for the clearance of refunds” and rejected the allegations outright against the finance minister.

The report also noted that non-FBR participants of the committee unanimously agreed that FBR officials were deliberately delaying the processing of refund claims and issuance of refund cheques of already-issued refund payment orders to show revenues on the higher side to placate the International Monetary Fund (IMF).

One of the committee members told The Express Tribune that a draft report had also been sent to the FBR, which did not object to the allegations levelled against the finance minister.  “The finance minister was sent the report by the FTO office with a covering letter before it was uploaded on the website,” he added.

The FTO spokesman, however, did not comment on whether the report was sent to Dar before being uploaded on the website.

Published in The Express Tribune, July 5th, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.


Hassan Ali | 8 years ago | Reply The fact is that the refunds have been withheld to show increased tax collection. Even the Finance Minister admited in Geo 10 PM programme on 1st July that the Sales Tax refunds outstanding were Rs 221 Billion.Now add to this about Rs 50 Billion Income Tax Refunds and Sales Tax Refunds whoes RPOs have not bee issued. I say pay off all refunds,let the economic activity start in the country BUT at the same time Reform FBR so that there is proper tax collection.
Bilal | 8 years ago | Reply No surprises here. Dar would lie his way through. The man does not have an honest bone in his body.
Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ