RPOs issued till June 30, 2016: MoF likely to pay GST refunds in first week of October

The Finance Ministry is likely to make sales tax refund payments to exporters in the first week of next month of October 2016, whose Refund Payment Orders (RPOs) were issued till June 30, 2016. Sources said that a meeting to this effect was held here on Monday between Finance Minister Ishaq Dar and Federal Board of Revenue (FBR) Chairman Nisar Mohammad Khan to discuss the possibility of one-off clearance of sales tax refunds.
Last payment of sales tax refund to the exporters, whose refund payments orders were issued till April, 2016 was made in August 24, 2016. Now the payment under discussion is for those whose refund RPOs were issued till June 2016. When contacted, a participant of the meeting told that the meeting discussed clearance of remaining sales tax refund in one go with tentative date of October 6, 2016 was set. Sources also claimed that total refunds up till June may be around Rs 100 billion.
On Monday Minister for Finance has directed chairman FBR to weigh the possibility of clearing in one-off payment. Finance Minister was also briefed on the tax collection of the first quarter and Finance Minister stated that tax collection was on target. An official said the falling exports are exerting immense pressure on the government with exporters citing pending refunds with tax authorities as one of the reason for decline in exports. The government was also being accused from many quarters of having achieved revenue collection target for the last fiscal year by withholding refunds of considerable amount.
Exporters have been urging the government during meetings that country's exports have become uncompetitive in the global market for various reasons with one of them has been pending sales tax refund with tax authorities. As a result, the exporters facing liquidity problems have to borrow from commercial banks which in turn increase their cost of doing business.
A statement issued after the meeting stated that Ishaq Dar chaired a meeting to review the revenue collection targets and the preparations for the sales tax refunds in cases where RPOs have been issued up till 30th June 2016. Chairman FBR briefed the Finance Minister about the latest revenue collection figures. He briefed that in the first quarter of the FY 16-17, the revenue collection targets have been satisfactory and will pick up further after Eid holidays.
The Finance Minister appreciated the efforts of the FBR team and directed to redouble efforts to meet the revenue targets. The meeting also discussed the tax related steps required to be taken by FBR under the Doing Business Reforms Strategy 2016. Finance Minister directed that every effort should be made to improve Pakistan's ranking in Doing Business Index. The Finance Minister shared with the FBR team the outcome of his recent visit to Paris for signing the OECD Convention on Mutual Administrative Assistance in Tax Matters.