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“Automatic refunds would eliminate the refund mafia, end delay in payments, foster exports and may even placate trading community protesting withholding tax on bank transactions.”
He demanded immediate legislation and installation of software which automatically processes the refund claims and transfers money into the account of the exporter within seven days of export. Speaking to the business community, he said that if transactions through credit or debit card could be updated within seconds, then the same technology should be applied to refunds as well.
“Many countries have a system in place where a train or bus passenger gets refund deposited into his bank account and he is notified through SMS if arrival is delayed.”
Hussain said that refunds worth over Rs100 billion have been held up by the FBR for a prolonged period, discouraging exporters.
Regional Tax Offices (RTO) have issued refund payment orders in many cases but FBR is reluctant to release the cheques which is against the law since payment has to be made within one week. This has pushed many exporters to the wall. Liquidity problem has taken a toll on the export sector where many have no option but to get costly credit from the market to fulfil commitments.
“Business community is asked to pay all the taxes in time but the same courtesy is not extended to them since their payments are stalled for protracted periods. This has dampened the investment climate.” He further added that the culture of flying invoices and fake refunds must be eliminated at all costs.
Published in The Express Tribune, August 22nd, 2015.
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