LAHORE: The Lahore Chamber of Commerce & Industry on Saturday has urged the Federal Board of Revenue (FBR) to release long-pending tax refunds as undue delay is
creating financial problems for the business across Pakistan.
LCCI President Mian Abuzar Shad, Senior Vice President Engineer Khalid Usman and Vice President Shahid Nazir Chaudhry expressed grave concerns over the adverse impact that non release of tax refunds are hitting the operational capacity of businesses, particularly small and medium enterprises (SMEs).
They said that the business community is facing an unprecedented financial crunch due to the ongoing economic downturn and high energy costs.
The delay in the disbursement of tax refunds is worsening the situation as businesses are unable to manage their cash flows effectively.
The LCCI office-bearers highlighted that these delays are impeding the ability of businesses to reinvest in operations, expand their ventures and retain employees. “In this challenging economic environment, timely access to tax refunds could act as a lifeline for many businesses that are struggling to stay afloat. We urgently request the FBR to accelerate the process of refund payments, as withholding these funds is causing severe liquidity problems for businesses,” they added.
Mian Abuzar Shad, Engineer Khalid Usman and Shahid Nazir Chaudhry underscored the disproportionate impact on SMEs, which form the backbone of the economy and are highly vulnerable to cash flow issues.
They said that for SMEs, timely tax refunds are crucial. These businesses already operate on tight margins and delays in receiving refunds can lead to disruptions in their supply chains, force them to take on debt at high interest rates or even push them towards bankruptcy. Many are finding it difficult to meet their operational expenses, including paying salaries, utilities and
suppliers.
LCCI President Mian Abuzar Shad said that Pakistan’s economic challenges have been compounded by external factors such as global inflationary pressures, fluctuating commodity prices and the depreciation of the Pakistani Rupee. Amid these challenges, the business community is doing its best to keep operations running but delayed refunds are choking businesses of much-needed liquidity. This situation is hampering not only domestic trade but also export competitiveness.
The LCCI office-bearers said that businesses rely on refunds to reinvest in operations, innovate and improve their competitiveness in global markets. They said that when refunds are delayed, businesses are forced to reduce production, scale back expansion plans and in some cases, lay off employees. This, in turn, affects consumer spending, government tax revenues and the overall economic growth of the country.
The leadership of the Lahore Chamber urged the government to take swift action to resolve the issue of pending refunds which has remained a long-standing concern for the business community.
LCCI office-bearers, while emphasizing the need for urgent intervention, said we understand that the government is dealing with multiple economic challenges, but the issue of refunds needs immediate attention. These funds rightfully belong to the business community and should not be held back. The release of refunds is not a luxury, it is a necessity.
In addition to calling for the immediate release of refunds, the LCCI leadership proposed that the FBR streamline its refund process to prevent future delays. They said that the current refund process is often cumbersome and time-consuming. LCCI recommends that the FBR introduce more efficient systems such as automated refunds or expedited processing for export-oriented businesses, which could ensure that businesses receive their refunds on time without unnecessary delays.
They added that improved communication between the FBR and the business community would help address concerns more effectively. The FBR should engage in more active dialogue with businesses to resolve issues related to tax refunds and create a more transparent process that ensures businesses do not face undue delays in receiving what is rightfully theirs.
Copyright Business Recorder, 2024