ISLAMABAD: The Federal Board of Revenue (FBR) has blocked genuine refund payment orders (RPOs) despite processing and clearance of genuine refund claims by the Regional Tax Offices (RTOs) for the last many months causing severe liquidity crunch for manufacturers/exporters.
Talking to Business Recorder here on Sunday, Abrar Ahmed Chief Executive of Shafi Reso-Chem and Executive Committee Member of Lahore Chamber of Commerce and Industry (LCCI) said that the reforms in the tax administration should focus on facilitation and taxpayer education for the registered persons. Surprisingly, the current reforms have not been able to change the mindset of the tax officials, who are causing problems for the genuine taxpayers instead of guiding them on new sales tax issues and SROs etc. Contrary to this, the Board has stopped payment of refunds to the genuine refund claimants despite fulfillment of all legal requirements at the level of the RTOs. The compliant taxpayers have dully followed the sales tax rules and procedures and strict checks of the FBR’s electronic systems like STARR, STREAMS and CREST etc., and the critical eyes of processing officers. Like past years, it seemed that the FBR has done to show higher tax collection in the last quarter by blocking refunds. Whenever the various manufacturing/ export associations approached the department, they are reluctant to give any sold reason.
Director of the leading industrial Siddiq Shafi Group was of the view that the data of the FBR’s electronic system is distorted which is evident from the recently compiled list of fraudulent refund claimants. The list contains names of compliant taxpayers causing defamation and panic among the business and trade. The genuine taxpayers regularly filing income tax and sales tax returns were surprised to see their names in the list of so-called dubious refund claimants.
Abrar, who is also a board member and Chief Executive of AFAQ (Association for Academic Quality), stated that it is necessary to guide the exporters on the accurate interpretation of new notifications and amendments in the tax laws. This could be done through interactive sessions between the tax department and business community. Without proper interpretation of newly issued SROs, it is impossible to properly apply tax laws in business transactions, keeping in view the education level in Pakistan.