ISLAMABAD/ KARACHI: The creation of Special Refund Zones (SRZs) by the Federal Board of Revenue (FBR) has failed to ensure timely payment of refunds and adjustments to taxpayers.
According to a communication of Pakistan Tax Bar Association to FBR chairman, the Bar would like to recall that specific refund zones have been established by the FBR. However, even then taxpayers are facing hardship in getting their refunds/ adjustments.
It said the Bar would appreciate if FBR can share with statistics about the progress of refund zones. Furthermore, in the presence of MIS, there is no justification for delays in issuing refunds/adjustments.
Non-payment of refunds hits export of seasonal fruits hard
The FBR should make the arrangements for automated process for issuance of Orders issued under section 170 of the Ordinance, initially in the cases of salaried person, already overburden category of taxpayer, at the earliest so that they feel facilitated and relieved.
Otherwise, delay in their refunds/ adjustments will enhance the trust deficit already existed between FBR and taxpayers.
The bar further said that the FBR has legitimatized the category of non-filer by specifying higher rates of tax deduction under various provisions of the Income Tax Ordinance (The Ordinance) for withholding purposes.
The FBR officers have sufficient information of non-filers collected during the course of various proceedings including audit, monitoring of withholdings taxes, further tax paid under Sales Tax Act, 1990 by the taxpayer for doing business with unregistered taxpayer’s and withholdings taxes deducted under section 236 G and 236H of the Ordinance. Therefore, FBR should share the information about the status of non-filers converted into filers.
Almost more than two years have been passed for the implementation drive of point of sale to document the supply chain. The FBR should public the data that how many point of sale have been installed across Pakistan and what is the impact of such implementation in terms of tax revenue collected through this real time invoice mechanism.
The bar has also sought data regarding FIRs registered, amount of tax evaded and how the culprits have been apprehended and brought to justice.
A concept of Synchronized Withholding Administration and payment system (SWAPS) and SWAPS agent were introduced through the Finance Act, 2022. Therefore, when FBR intends to initiate monitoring of withholding taxes through technology, ie, the SWAPS and SWAPS agent? PTBA added.
Meanwhile, sources said that FBR during the recent meeting of the Senate Standing Committee on Finance admitted that Rs 309 million from POS service fees, which was supposed to be utilized for customer incentives and technical improvements, was diverted to employee welfare. The board had collected Rs 647 million since July 2023 through a Re 1 fee on each POS invoice.
Sources said that FBR obtained approval from the former finance minister to deposit the said fee collection in a private bank account, ostensibly to run a customer prize scheme, smoothly. While the scheme was suspended shortly after launch, the Re 1 fee collection continues, primarily benefiting FBR employees, they added.
Copyright Business Recorder, 2024
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