PHMA urges FBR to expedite disbursement of sales tax refunds

LAHORE: The Pakistan Hosiery Manufacturers & Exporters Association (PHMA) on Saturday asked the Federal Board of Revenue to speed up releasing value-added knitwear industry’s sales tax refunds to help ease up its cash flow, especially for payment of wages to its workers on Eid days.

PHMA North Zone Chairman, Naseer Butt said that the value-added export-oriented industry is under extreme financial crunch and is facing losses of billions of rupees as its liquidity remains stuck due to delay in release of sales tax refunds.

Our members exporters have been complaining of facing inconvenience and inordinate delays in the payment of sales tax refund claims, as the government has stopped releasing all the sales tax refund claims whereby exporters’ precious liquidity worth billions of rupees have been stuck, he added.

Naseer Butt observed that a sharp decline in exports and foreign exchange earnings is hindering production while the government is not giving any heed to the repeated calls to save the export industries, which are facing the most difficult times in history.

He said that the industry continued to suffer due to shortage of gas and constant power breakdowns, shortage of industrial raw materials caused by restrictions on opening of Letter of Credits (LCs), discontinuation of DLTL and Regionally Competitive Energy Tariffs.

The knitwear industry had earlier expressed satisfaction over the functioning of the FBR’s FASTER system, which was processing claims electronically as per law and rules without any delay.

The FASTER system was introduced to end human intervention and process the sales tax claims electronically, while the new parameters introduced in the STGO involving FBR officials will defer the sales tax claims and again open the floodgates to corruption, he pointed out.

He said that a huge amount of exporters’ liquidity is lying frozen with the FBR. As a result, the textile export industry has become unviable and is on the verge of collapse.

The PHMA Chief appealed the FBR Chairman to remove the flaws and rectification of technical glitches in the FBR’s sales tax FASTER system, which has been causing delays in the processing of sales tax refunds, resulting in a liquidity crunch and hampering exports.

Copyright Business Recorder, 2023