ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue, Dr Abdul Hafeez Shaikh has directed the Federal Board of Revenue (FBR) to immediately clear income tax refunds of exporters of Rs50 million and above on priority basis.
This was stated by the adviser, while chairing a virtual meeting of the FBR technical committee that was convened to discuss in detail the refunds as well as other issues related to taxes. The adviser assured the FBR technical committee that finance ministry would clear Rs50 million sales tax refunds on an urgent basis.
However, from those above Rs50 million sales tax refunds, Rs50 million would be paid at the earliest, the adviser added. The meeting of the technical committee was attended by Chairman FBR Muhammad Javed Ghani, and other senior officials participated in the meeting.
Sources told Business Recorder that Dr Abdul Hafeez Shaikh stated to the members of the technical committee, "You can consider me as a member of this committee just like you. If you want to add more members, you do so. We are here to resolve the problems of the business community and suggestions of the FBR technical committee would be incorporated on top priority basis."
The Technical Committee is headed by Abid Shaban and other members include Khurram Mukhtar, Ejaz A Khokhar, Khurram Tariq, Javed Bilwani, Ali Jameel, Zakriya Usman, Abdul Rashid Jan Muhammad, Aman Ghanchi, and Member Customs Policy/Customs Operations. Member IR Policy will also be the secretary of the Committee.
Abid Shaban gave a detailed presentation during the meeting. The government has decided to immediately improve the working of three refund systems i.e. "FASTER" system of sales tax refunds for exporters, rebate system, and Drawback of Local Taxes and Levy (DLTL) refunds for speedy payment of refunds to the exporters.
The FBR's technical committee submitted suggestions to bring about efficiency and transparency in the FASTER refund system. After due deliberation, it was decided to engage experts as co-opted members to streamline the working of the technical committee.
Representatives of the Commerce and Industries Divisions would also be included to further strengthen the Technical Committee. During the meeting, "FASTER" system of sales tax refund for exporters was appreciated. It was agreed that both the FASTER and the Rebates systems would be fine-tuned for more efficient results on priority basis.
The Technical Committee directed the Ministry of Commerce to clear the backlog with reference to the DLTL refunds expeditiously. The FBR would devise a strategy for liquidation of pending income tax returns. The Adviser Finance urged the Technical Committee to simplify relevant procedures ensuring clarity and transparency in revenue collection.
The Terms of References of Technical Committee include the identification of distortions, anomalies and inequalities in the taxation system, which cause difficulties for taxpayers, or which discourage investment, industrialisation and documentation, and propose solutions. The committee will propose measures to reduce the dependence on withholding taxes, minimum tax, advance tax, etc.
The committee will also propose measures for simplification of all taxation procedures, in a manner which does not compromise revenue collection and documentation. Further, proposals for improvements in the temporary importation and manufacturing bond schemes in order to enhance their scope and facilitate direct and indirect exporters throughout the value chain will also be finalised by the committee.
The Committee will identify issues hindering smooth processing of refund claims through the FASTER system. It will propose amendments in the procedures or thresholds relating to sales tax refund of various sub-sectors of exporters, and will propose remedies for issues relating to adjustment of input tax paid against services subjected to sales tax by the provinces.
Copyright Business Recorder, 2020