ISLAMABAD: The Federal Board of Revenue (FBR) paid income tax refunds of Rs54.221 billion during 2021-22 against Rs91.278 billion in 2020-21, reflecting a major decrease of 40.6 percent.
The data compiled by the FBR here on Monday revealed that the FBR has witnessed a major decrease of Rs37.057 billion in direct taxes refund payments during 2021-22 when compared with 2020-21.
On the other hand, the Board has paid refunds of Rs378.9 billion [sales tax, income tax and customs duty] during 2021-22 against Rs326.593 billion paid in 2020-21, reflecting an increase of 16 percent.
According to the FBR’s data on refunds, it is the policy of the government to support the business community through expeditious refunds. In line with this policy, the FBR made higher refund payments in 2021-22 as compared to the corresponding period of the last fiscal year.
Accordingly, during FY 2021-22 refunds amounting to Rs378.9 billion were paid. The refunds paid were higher by Rs52.3 billion or 16.0 percent as compared to PFY.
In order to facilitate the exporters, the manual rebate approval system has been replaced with RMS based, fully automated/system-based processing of duty drawback payment without involving any human intervention. Under the automated system, the exports Good Declaration is termed as rebate request.
Direct taxes have contributed 37.2 percent to the total tax collected during FY 2021-22. Net collection stood at Rs2,284.9 billion reflecting a growth of 32.0 percent over the PFY collection of Rs1,731.3 billion. An amount of Rs54.2 billion has been paid back as refund to the claimants in FY 2021-22. The collection of direct taxes comprises withholding taxes (WHT), advance tax, payments with returns and collection on demand (COD), the FBR added.
Despite a substantial increase in absolute terms, the target of sales tax has been met to the extent of 98.3 percent which could be attributed to the high growth in payment of refunds whereby about Rs80 billion were paid over and above the amount of sales tax refunds paid during the previous fiscal year.
Copyright Business Recorder, 2022
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