Delay in tax refunds leads to closure of many SMEs

Exporters seek release of tax dues by April 20

MULTAN: The business community has pressed the Federal Board of Revenue (FBR) to immediately clear those outstanding tax refund cases for which release payment orders have been issued as liquidity crunch is causing a decline in textile exports.

In a statement, Multan Chamber of Commerce and Industry (MCCI) President Khawaja Jalaluddin Roomi emphasised that the FBR should settle tax dues before the deadline of April 20 set by the apex chamber of commerce and industry.

"If the FBR fails to meet the demand, the business community will be forced to take steps as per decision of the apex chamber - the Federation of Pakistan Chambers of Commerce and Industry (FPCCI)," he said.

Exporters say they are facing a lot of hardships because of the dearth of liquidity that is required to run their operations smoothly.

According to Roomi, many small and medium-sized enterprises (SMEs) have already been closed down in Multan, Bahawalpur, Dera Ghazi Khan, Faisalabad, Kasur and Gujranwala as they could not sustain in the presence of huge outstanding rebate and refund of sales tax, income tax and customs duty.

In this situation, he said, "industries took bank loans to meet export commitments, but now they are being turned away by the banks."

In last year's budget speech, the finance minister had promised to pay all pending tax refunds of exporters. However, only Rs26 billion was released in August 2016 and Rs27bn in the middle of November.

Tax refunds worth around Rs250 billion were stuck with the FBR, Roomi said, dismissing the FBR's claim that Rs150 billion was outstanding as it did not include deferred payments.

Published in The Express Tribune, April 8^th, 2017.

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