Traders in dire straits: FBR begins rolling back RPOs

Financial problems of business fraternity are going to be more severe as Federal Board of Revenue (FBR) has started rolling back sales tax 'Refund Pay Orders (RPOs) to meet its annual revenue budgetary target, it is learnt on Tuesday. According to sources, the business community, which is already down in the dumps because of poor economic conditions and worst power crisis, is now facing severe financial constraints as the Board has begun withdrawing their RPOs without assigning any reason.
They said the move was aimed at withholding RPOs to show artificial revenue collection during last month of fiscal year 2013. Replying to a question, sources said RPOs would only be rolled back if taxpayers were unable to produce relevant documents and tax office had to send notices to the taxpayers for clarification before voiding their RPOs. When contacted, Adnan Mufti FCA, Partner of Shekha & Mufti and Member ICAP Taxation Committee confirmed that the tax department was cancelling RPOs to hold the release of sales tax refunds till the end of last fiscal month.
He says, "We have submitted complaints but the authority instead of resolving the issue obliquely intimated that they would release all cancelled sales tax refunds in July." He says, "Sales Tax Rule, 2006 empowers the tax officials to conduct post refund audit after releasing refunds to verify the authenticity of refund claims but there is no authority to anyone for rolling back RPOs."
Mufti says, "This illegal practice has been continuing for many years under the guise of administrative measures and nobody bothers to stop it. It has put already depressed business fraternity into deep financial crisis." He says, "the authority is used to fixing its revenue target at unrealistic level without new source of revenue that not only creates excessive burden on already suppressed taxpayers but also forces taxmen to exercise such practices."
He suggests, "the only way to grab this unlawful practice is the government should control its expenditure side and set its annual budgetary target at a rational level." On the other hand, chief commissioner RTO-II Khawaja Tanveer dispelled the impression such practices are taking place in the tax department to meet annual revenue target, saying that the FBR chairman had directed its field formation to ensure the release of tax refunds on time. He says, "We are optimistic about achieving our annual revenue target by collecting Rs 300 billion during current month."