
The Overseas Investors Chamber of Commerce and Industry (OICCI) has urged the Federal Board of Revenue (FBR) leadership to expedite the settlement of long-pending income and sales tax refund claims amounting to Rs96.6 billion, citing adverse effects on the financial liquidity and investment outlook of foreign investors in Pakistan.
In a letter addressed to FBR Chairman Rashid Mahmood Langrial, OICCI reiterated its concern over the substantial backlog of refunds despite recent progress by the tax authority. The chamber noted that as of September 2025, outstanding claims included Rs62.2 billion in income tax refunds and Rs34.4 billion in sales tax refunds, according to a summary enclosed with the communication.
"We value the continued cooperation of FBR in addressing refund claims and acknowledge the progress made over the past few months. However, despite these efforts, as of September 2025, the total outstanding refund claims of OICCI members remain significant at Rs96.6 billion (Income Tax Rs62.2 billion and Sales Tax Rs34.4 billion)," read the letter.
OICCI, which represents over 200 multinational companies operating across various sectors in Pakistan, regularly engages with the government on fiscal, regulatory, and policy matters affecting foreign investors.
The chamber emphasised the need for a transparent and time-bound tax refund system, warning that prolonged delays and fiscal uncertainty continue to strain the operations of foreign investors.
OICCI Chief Executive and Secretary General M Abdul Aleem highlighted that the delays in releasing refunds disrupt business planning for member companies, many of whom are leading multinational investors. "Their sustained contribution to the economy, in terms of capital investment, employment generation, and technology transfer, requires a business environment where fiscal commitments such as tax refunds are honoured in a structured and timely manner," the letter stated.
The letter, copied to Finance Minister Muhammad Aurangzeb, Board of Investment Secretary Capt (R) Muhammad Mehmood, and OICCI President Yousaf Hussain, stressed that prompt resolution is vital to improving the ease of doing business and attracting further foreign investment.
According to OICCI, 74 member companies, mostly based in Karachi, with some in Islamabad and Lahore, currently have pending refund claims with the FBR. The list includes firms from the power, chemical, and industrial sectors, including K-Electric and several manufacturing mills.
While acknowledging that automation within the FBR has improved documentation and procedural efficiency, a businessman, requesting anonymity, noted that it has not brought meaningful relief in clearing refunds. "The decision still comes from the top. It's a policy-level matter tied to the government's fiscal management," he said, adding that refund delays are often used to manage budgetary constraints.
The companies keep paying their dues, OICCI members contribute nearly Rs10 billion in taxes every day, yet once they pay, "getting a refund back becomes an uphill battle," the official remarked. "When refunds are delayed, it creates liquidity issues and generates negative publicity abroad, especially at headquarters in Europe or the US, which damages Pakistan's investment image."
He highlighted bureaucratic inefficiencies, describing the FBR as a "large organisation where one hand doesn't know what the other is doing," with each department focused only on meeting its daily revenue targets.
Despite these challenges, cooperation between the FBR and companies continues. OICCI noted that member firms have even helped the FBR meet short-term revenue targets by paying advance taxes, expecting similar reciprocity when refunds are due.
He also pointed to the recent exit of Procter & Gamble (P&G) from Pakistan as a reminder of the importance of creating a predictable and supportive business environment. While P&G's departure was attributed primarily to business and currency factors rather than direct policy issues, he underlined the broader challenges for multinationals operating in Pakistan.
"When P&G entered Pakistan, the dollar was at Rs60. Now it's around Rs280. It becomes impossible for a global CEO to justify such an environment to shareholders," he said. "The products will still be available through third parties, but the loss is in technology transfer, training, and human resource capacity building, the intangible assets that multinationals bring."
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