February 4, 2020 (MLN): The National Assembly Standing committee on Finance and Revenue on Tuesday directed Federal Board of Revenue (FBR) to expedite payment of tax refunds to export oriented industrial sector besides settling down all other demands of the business community.
The committee said that both the business community and FBR should sit together to resolve their issues and asked the representatives of business community to report the committee on February 12 about their level of satisfaction.
Chairman of Pakistan Textile Export Association (PTEA) said that due to the late payment of tax refunds, the industrialists were facing severe liquidity issue resulting in slowing down of production process.
He said in the wake of corona virus in China, the people from across the world were hesitating to travel to China and they were now turning to Pakistan to fetch orders from the textile sector.
However, he feared, this opportunity could be lost due to the fact that without liquidity the industrialists could not be able to secure additional orders.
FBR Acting Chairperson Nousheen Javed Amjad informed the meeting that the board was actively engaged in timely payment of all refunds. However, she said, a major portion of refunds claim got rejected due to fake claims or due to wrongly filed returns.
She said since the refund system was running completely on automated system and no manual system was involved, the system does not accept the claims which have some flaws or technical fault.
FBR member policy Dr. Hamid Attique said during the current fiscal year, the FBR had so far paid refunds of Rs 62 billion to the export oriented sector.
He said that while claiming refunds, normally the people made mistakes which result in rejection by the automated system.
President Faisalabad Chamber of Commerce and Industry said that after a lengthy struggle, the business community managed to convince the government to bring the export sector under zero rated, but the present government had reversed the decision which was affecting the business community.
He also demanded to ensure payment of all refunds within 72 hours as promised by the Prime Minister Imran Khan.
He also demanded to immediately withdraw condition of National Identity Card for business sector besides, proposing FBR to stop tax evasion on manufacturing sector.
He warned that if the government did not fulfill their demand they would go on strike.
Chairman of the committee asked FCCI to postpone their strike call as the committee had already directed FBR to resolve the issues by February 12.
Responding to the FCCI Chairman, Dr Hamid said that the condition of ID card was put on their demand and now they were asking to withdraw it.
He said the traders and retailers were capturing a huge chunk of portion of Gross Domestic Product (GDP) as they contribute Rs 8 trillion or 18% of the GDP while they pay taxes of only Rs 16 billion in a year.
Besides he said that the zero rating was nowhere in the world and Pakistan was the only country where there was a concept of no tax and no refund of export sector.
He said in order to create fiscal space for the country, the government was committed to document the economy and therefore condition of ID card for businessmen could not be withdrawn.
Earlier discussing the matter of electricity tariff issue for the export sector, the committee expressed its reservations over non serious attitude of the ministries of commerce and power as irrelevant officials attended the meeting who did not possess enough information to brief the committee.
Chairman Faiz Ullah said that the committee would brief the prime minister over non serious attitude of the bureaucracy.
“The prime minister is eager to enhance exports of the country, however, the concerned officials were not taking interested in this regard”, he added.