Taxpayers are facing a liquidity crunch from the first month of the current fiscal year, as Federal Board of Revenue (FBR) is reluctant to release their pending tax refunds. According to sources, over Rs 2.3 billion tax refunds were pending for last many months but tax offices are still hesitant to release tax refunds even in July.
"In the past, tax offices used to block tax refunds till June to show artificial revenue collection against budgetary revenue collection targets, but now taxpayers are struggling to get tax refunds even in July," they said. They added that the restriction imposed by the finance ministry to release tax refunds not more than Rs 0.5 million was supposed to be budgetary measure for tax year 2013-14 but delaying tactics from tax offices to release tax refunds in current fiscal year was incomprehensible.
Sources said that tax refunds of major multinational and national companies, which was in billions, had been stuck since last October and added that these companies, which were considered as efficient taxpayers, were now passing through liquidity problems, due to unnecessary delay in release of the tax refunds. Moreover, sources said that big taxpayers, who were earlier pressurised not to file tax refund till the end of June, were now facing rejection or delay against their refund claims. When contacted, FBR officials dispelled the impression of withholding billions of rupee tax refunds, saying that the department was processing refund claims as per procedure and there was no restriction on the release of tax refunds.