The refund payment of direct taxes has shown a decrease of 3.8 percent during the first half of (2010-2011) as compared to the corresponding period of last fiscal. The FBR quarterly review issued here on Thursday revealed that the FBR has undertaken a revolutionary step by setting up a Centralised Sales Tax Refund Office (CSTRO) in the FBR headquarters during current fiscal with focused attention on timely issuance of processed refund claims.
The FBR is also focused on resolving pending sales tax refund claims. Pendency has been reduced by 22 percent by December 2010. This step will resolve the liquidity issues of the taxpayers and will ultimately accelerate the on-going economic activities in the country.
Approaching the issue in a holistic manner, it is clear that there has been 44.2 percent growth in the total refund payments. The reason is that, refund arrears related to the stuck up amounts are now being cleared expeditiously. Similarly, to clear the large backlog, the sales tax pendency is also being liquidated promptly but will take more effort to completely clear the deck. The refunds/rebates of customs have also increased substantially. However, the refund payments in case of direct taxes have come down by 3.8 percent, FBR report added.
It may be mentioned that to address the taxpayers' complaints and clear the backlog, a Centralised Sales Tax Refund Office (CSTRO) in the FBR headquarters has been established during CFY with focused attention on liquidating all pending sales tax refunds and timely issuance of refunds. This step has resolved the liquidity issues of the taxpayers.