The Expeditious Refund System (ERS) of the Federal Board of Revenue (FBR) is unable to pay the sales tax refunds within 1-2 weeks of the filing of claims by the registered exporters since launching of the system in March 2010. Tax experts told Business Recorder here on Monday that the implementation of the Reformed General Sales Tax (RGST) is directly linked with the performance of the Expeditious Refund System (ERS) for payment of sales tax refunds to exporters without delay.
In best tax administrations, the VAT refund has been paid within a couple of days of filing of claims. If the taxpayers would get sales tax refund without delay, their apprehensions about the RGST would be removed due a great extend. It would be a big confidence building measure for the taxpayers to accept the RGST in case they successfully get the refunds within 1-2 weeks under the ERS. However, it seemed that the FBR has yet not made any significant progress in this regard. In many cases, the ERS claims have been referred to the normal manual system. The FBR has to investigate the reasons which resulted in diversion of electronic claims to the normal processes.
Sources said so far the FBR has not extended the ERS to all the sales tax registered taxpayers, reflecting slow progress of the system. Presently, it is mandatory for the manufacturers-cum-exporters to file their claims under the ERS, but many claims were disqualified and referred to the normal refund payment system. A major factor for slow implementation of the progress is the lack of education about the ERS among the business community.
It is strange to note that the FBR's concerned departments seemed to be not interested to educate the taxpayers on the ERS on regular basis. It is interesting to note that the FBR has also not chalked out any short-term or long-term educational programs for taxpayers on the ERS except few seminars arranged in the past. Without proper education the manufactures-cum-exporters could not file error-free claims under the ERS. Due to lack of education, exporters commit mistakes while filing of claims under the ERS. Strangely, this most important area appeared to be neglected by the FBR.
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