ISLAMABAD - The Federal Board of Revenue (FBR), which is facing massive revenue collection shortfall during the ongoing financial year, is withholding Rs87.7 billion tax refunds of the exporters and domestic suppliers to show a higher collection.
The break-up of the current Rs87.7 billion tax refunds showed that Rs48.7 billion refunds are of the exporters and Rs39 billion of the domestic suppliers. The FBR has 84,568 cases of refunds. According to the documents, as many as 25,669 cases of refunds worth Rs15.7 billion are pending in the FBR and 58,899 cases of refunds worth Rs72 billion are in the field formations.
The further details of the overall refunds showed that textile sector refunds stood at Rs24.8 billion, electrical energy at Rs14 billion, natural gas at Rs7.1 billion, POL products at Rs6.2 billion, dairy products at Rs6.02 billion, chemicals at Rs4.5 billion, vegetable ghee at Rs2.4 billion, agricultural tractors at Rs2.3 billion, food products at Rs2.3 billion, paper products at Rs1.6 billion, steel iron at Rs1.5 billion, leather and shoes at Rs1.48 billion, machinery at Rs1.3 billion, services at Rs1.1 billion, auto and auto parts at Rs1.1 billion, rice at 1.09 billion, plastic products at Rs1.09 billion, surgical instruments at Rs815 million and others at Rs7.1 billion.
“The FBR has withheld the tax refunds to show its collection is higher”, said a textile exporter. The FBR every year follows this practice to cover its inability of achieving the tax collection target for every financial year, he added.
The Federal Board of Revenue had missed the revenue collection target of the first quarter (July-September) of the ongoing financial year by Rs40 billion, as it collected only Rs600 billion as against the target of Rs640 billion for the said period. The government is now considering announcing mini-budget worth Rs40 billion to bridge the tax collection shortfall. New taxes on domestic consumer goods as well as luxury products will be imposed next month by the government as directed by the International Monetary Fund.
“FBR and its failed formations are paying the sales tax refunds to exporters and other refund claimants as per relevant provisions of law,” said the official documents of the FBR presented in the National Assembly Standing Committee on Finance and Revenue. The FBR had paid Rs22.5 billion as tax refunds during four months (July-October) of the current fiscal year as against Rs16.1 billion in the corresponding period last year, showing an increase of 13 percent. “It may be pointed out that during same period exports have shown a negative growth of 11% from Rs800 billion to Rs711 billion. This shows that FBR is not only clearing the current claims bit also clearing the backlog”.