Former Federal Board of Revenue (FBR) chairman Shabbar Zaidi has said that tax refunds have nothing to do with who the FBR chairman is, and that they are handled by the field officer.

Speaking to Business Recorder, he stated that there is nothing wrong in releasing refunds.

His statement comes in response to remarks by Finance Minister Ishaq Dar on Friday in which he said: “Zaidi should be in jail for releasing billions of rupees of refunds to businessmen.”

Earlier in a TV show, Zaidi had criticised Dar’s finance team and blamed him for deadlock between Pakistan and the International Monetary Fund (IMF) for the next tranche of loan programme.

Tax experts and businessmen also told Business Recorder that tax refund is the amount which businessmen submit in excess to their returns “therefore they are entitled to receive it sooner or later.”

“Disbursing the tax refunds to businessmen is not wrong at all,” said former Karachi Tax Bar Association (KTBA) president Zeeshan Merchant. “If it is wrong, then the FBR’s entire policy book is wrong.”

“These refunds are results of excess withholdings/payments at every stage,” Merchant said.

Meanwhile, Merchant added that the claim for refund initiates from a businessman, who applies for refunds to the commissioner. The commissioner asks the field officer for verification after which, an order is released and refunds and disbursed to the businessman from FBR’s central office and details are duly recorded in the FBR’s central database.

Pakistan Apparel Forum Chairman Javed Bilwani said tax refunds should be released as soon as possible otherwise businesses face liquidity issues and rise in cost of doing businesses. It is because businesses resolve their liquidity issues by taking loans, which increases financing cost.