PAF hits out at FBR for freezing bank accounts

Accounts of exporters who have filed appeals have also been frozen

KARACHI: The Federal Board of Revenue (FBR) again came under fire from business representatives for freezing bank accounts of exporters.

Criticising the FBR for such lop-sided actions, Pakistan Apparel Forum (PAF) Chairman Muhammad Jawed Bilwani urged the prime minister and finance minister to take notice of the situation and rein in the FBR.

Bilwani claimed that current actions were motivated by the need to meet budgetary revenue collection targets, without concern for the negative consequences they could have on the country’s export sector, business environment and economy.

Notices have been issued to several exporters under Section 48 of the Sales Tax Act 1990 & Rules thereof for freezing their bank accounts in spite of the accepted principle that rules cannot be imposed until the first appellate remedy is exhausted.

“Bank accounts of exporters who have filed appeals and are waiting for adjudication have also been frozen,” Bilwani claimed, adding some exporters were not even notified beforehand.

Delay in tax refund payments was compounding the problems of exporters, he said, adding that refunds of sales tax, withholding tax, customs duty and under the Drawback of Taxes and Levies schemes had not yet been paid.

He further said that in most cases, appellate courts had ruled in favour of exporters and issued Refund payment Orders (RPO), which had not been complied with, resulting in increased cash flow problems. Labelling FBR’s actions as ‘anti-export policies,’ Bilwani warned of a liquidity crunch which could further cripple the already declining textile exports.

“The conduct of the FBR is also highly contradictory as its entire energy is focused on squeezing existing taxpayers without bringing tax evaders in the net to broaden the tax-to-GDP ratio,” he added.

Bilwani stated that workers in the export sector were most affected by the move since freezing of bank accounts had led to delay in salary payments which were due before the end of June on account of Eidul Fitr.

Published in The Express Tribune, June 21^st, 2017.

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