FASTER refund system: Govt to curb payments to non-compliant taxpayers

ISLAMABAD: The federal government has decided to impose major restrictions on the payment of refunds under the FASTER refund system to exporters and other categories of taxpayers who fail to comply with digital initiatives, including production monitoring systems, digital eye systems at manufacturing premises, and sales tax digital invoicing requirements.

Sources told Business Recorder that the decision has been taken and a formal notification is expected to be issued in the upcoming budget 2026-27. This is the biggest enforcement measure, to be announced in the budget, for compliance with digital initiatives by leading sectors.

The payment of refunds under the “FASTER” system would be linked with the compliance of digital initiatives like production monitoring, sales tax digital invoicing, and digital eye initiatives.

READ MORE: FASTER system: FBR eases cap for deferred ST refunds

According to sources, the new risk parameter would be included in the “FASTER” refund payment system to ensure enforcement/installation of digital cameras and digital eye Systems at the five leading export-oriented sectors, including textile, leather, surgical, carpets, and sports goods.

The exporters, who are expected to be affected by the said Risk-parameter, would cover those exporters who are also engaged in local supplies in the domestic market.

The Federal Board of Revenue (FBR) has already given a deadline of June 15, 2026, to all manufacturers of bottled water to install an electronic production monitoring system.

The electronic production monitoring system is also mandatory for the packaged milk, iron and steel, oil, and ghee from factories. The production monitoring system is being installed at the textile spinning units.

Exporters and other big taxpayers, who would not comply with the risk parameter of installing a production monitoring system or sales tax digital integration, would not be able to get refunds under the “FASTER” system.

On average, the payment of sales tax refunds under the “FASTER” system stood at nearly Rs30-40 billion per month to five top export-oriented sectors. The sales tax registered persons would be bound to comply with the digital initiative of digital invoicing to continue to obtain refunds under the “FASTER” system, they added.

Copyright Business Recorder, 2026