Foreign firms await release of Rs79.9bn tax refunds

August 18, 2022

KARACHI: Tax refunds owed to foreign firms operating in Pakistan by the government have reached a massive Rs79.9 billion as of July 2022 owing to prolonged foot-dragging on the settlement, industry...

Share Next Story >>>

KARACHI: Tax refunds owed to foreign firms operating in Pakistan by the government have reached a massive Rs79.9 billion as of July 2022 owing to prolonged foot-dragging on the settlement, industry officials said on Wednesday.

“Delayed settlement of legitimate tax refund claims, in some cases pending for several years, negatively impacts existing and future FDI (foreign direct investment) in the county,” Overseas Investors Chamber of Commerce & Industry (OICCI) noted in a letter to Chairman Federal Board of Revenue (FBR).

The representative body of the foreign investors pointed out that total outstanding income and sales tax claims increased by Rs3 billion to Rs79.9 billion in July from Rs77 billion in April this year.

According to the list of claims submitted with FBR for the companies based in Karachi, Hub Power Company has a total outstanding refunds of Rs8.9 billion, followed by K-Electric’s Rs8.5 billion.

Frieslandcampina Engro Pakistan Ltd’s (formerly Engro Foods) outstanding claims stand at Rs6.1 billion followed by Procter and Gamble Pakistan (Pvt) Ltd whose claims have reached Rs2.4 billion.

Aisha Steel Mills’ total outstanding claims amount to Rs1.96 billion and Abbott Laboratories (Pakistan) Limited’s to Rs1.89 billion. Tri-Pack Films Limited’s claims are recorded at Rs1.78 billion followed by Standard Chartered Bank with Rs.1.67 billion worth of claims.

Ghandhara Tyre And Rubber Company Limited’s (formerly General Tyre and Rubber Company) claims stand at Rs1.54 billion and Archroma Pakistan Ltd at Rs1.51 billion. Iffco Pakistan (Private) Limited’s claims are reported to be Rs1.35 billion and Siemens Pakistan Engg Co Limited’s Rs1.27 billion.

Among Islamabad-based companies, Pakistan Telecommunication Co Limited’s claims are estimated at Rs9.83 billion, whereas Pakistan Mobile Communications Limited at Rs1.60 billion, followed by Telenor Pakistan and Uch-II Power (pvt) with claims of Rs115 million and Rs85 million respectively.

Among Lahore-based companies, Tetra Pak claims stand at Rs4.87 billion, Nestle Pakistan Limited at Rs3.9 billion, and Coca-Cola Export Corporation’s claims are Rs2.34 billion on account of sales tax and income tax.

Tax refunds should be an ongoing process so as to avoid liquidity issues of our members who continue to pay huge tax on their ongoing business activities, OICCI emphasised in the letter.



More From Business