ISLAMABAD: The FBR has directed the field formations to immediately pay all pending income tax refunds filed under Section 170 of the Income Tax Ordinance 2001 for tax year 2020 by January 31, 2021.

According to the FBR's instructions issued to the field formations on the processing of income tax refund applications, the FBR said that the payment of refund or adjustment of refund have identical financial impact for the exchequer and therefore both warrant equal focus and application of mind so that no undue and undermined refund is either paid out or adjusted to/by the taxpayer.

In this connection, the data of income tax refund applications have been obtained from the field formations/PRAL for T/Y 2020, and examined. The data transpire that out of the total refund claims of Rs74.313 billion in the tax year 2020, 6,073 applications covering an amount or Rs4.254 billion have been lodged.

It is our institutional stance that current year's refund liability should be paid out of the current year's revenue stream and that no due refunds should be withheld. It would also help us ward off unnecessary complaints against us for delayed processing of refund applications and/or non-payment of refund to the taxpayers. Thus, formation-wise data of refund applications lodged has been emailed to the field formations.

Accordingly, all formations are requested to dispose of all applications lodged under section 170 of the Income Tax Ordinance 2001 by by January 31, 2021.

Copyright Business Recorder, 2020