Upcoming budget: FBR to issue new rules to process pending refund applications

ISLAMABAD: The Federal Board of Revenue (FBR) will issue new rules and regulations in budget 2024-25 to electronically clear 93,874 income tax refund applications pending in the field formations, involving stuck up revenue of billions.

Sources told Business Recorder that a total of 93,874 income tax refund applications are not processed by 25 FBR’s field formations till May 2024. The FBR’s data revealed that the income tax refunds processed and disbursed through FBR’s system from March-2021 to April-2024 stood at Rs 73.370 billion in 31,480 cases.

Under the existing provisions of Section 171 of the Income Tax Ordinance, 2001 a taxpayer is required to file an online application on FBR’s IRIS e-portal to the concerned Commissioner IR and Revenue bearing jurisdiction. In this regard, necessary rules and regulations are in process of being drafted by the IR Policy Wing of the FBR, and the matter has also been referred to the IT Wing of FBR to effectively design, develop, code, test, quality assure, deploy and maintain the of Section 170A module.

FBR to issue uniform tax recovery rules in budget

Sources said that the field formations have been directed to process pending refund applications at the earliest after giving at least three opportunities of being heard of fifteen days each to the refund claimants.

Moreover, the field formations have been directed to take utmost care and precautions so that no income tax refund claimant is left unheard.

However, it is also admitted that currently there are no procedures/ rules for the implementation of Section 170A of the Income Tax Ordinance, 2001 which basically enables the issuance of income tax refunds without any application.

According to sources, currently the entire income tax refund processing system of the FBR is highly automated and sophisticated.

The system has evolved over the years and its software has been so upgraded in a way that no refund of any taxpayer can be deposited in the IBAN/ bank account of another taxpayer. Moreover, there is no tab or command prompt in the CITRO Graphical User Interface (GUI) which can permit the alteration of any taxpayer’s IBAN/ bank account details.

The system has been so designed and upgraded in compliance of safety/ anti-corruption protocols inline with the policies of the State Bank of Pakistan (SBP) with the sole aim that only that taxpayer can receive the refund amount in whose name the refund order has been issued.

Moreover, only the taxpayer has rights to add/ amend its IBAN/ bark account details; the FBR’s field formations or the Office of the Chief Refunds/ CITRO has no authority to change any IBAN/ bank account details of any taxpayer.

The FBR has introduced the IRIS 2.0 in August, 2023 whereby the e-filing of income tax returns has been streamlined.

Now the taxpayers can e-file their income tax returns by virtue of online wizard and apply for income tax refunds online and also attach requisite documentation/ evidence on PDF format without any hassle. However, the general population is still unaware of this IT automation processes. The need of the hour is to educate the masses so that they could e-file their returns online and also claim their refunds (if any), the officials added.

Copyright Business Recorder, 2024