Foreign investors demand release of Rs46bln tax refunds

KARACHI: Foreign investors urged the Federal Board of Revenue (FBR) to release the stuck refunds to the tune of Rs46 billion on a priority basis to help them avert their liquidation problems, sources said on Monday.

The sources said the members of Overseas Investors Chamber of Commerce and Industry (OICCI) irked over a huge amount of refund claims that were not settled despite repeated pledges by the FBR authorities.

OICCI, which is a platform to promote foreign investments, is playing a major role in growth of commerce and industry in the country. The chamber has also approached the FBR chairman for an immediate release of refund amount. 

“Total refunds of all the companies are around Rs46 billion, which is about 4.5 percent of total tax and levies paid by (OICCI) member companies in 2016,” the member said, requesting anonymity.

OICCI members are contributing around one-third of the total tax collection in the country. The chamber is closely working with FBR and other key functionaries in the government, both at the federal and provincial levels, the member added.

The member said the purpose of approaching the FBR chairman was to seek his urgent attention to settle the long-pending tax refund claims of OICCI members.  “The unsettled refund amount is causing an undue concern to this group of largest taxpayers in the country,” the member added.

OICCI has also raised this issue at several forums as tax refunds are one of the most critical matters for foreign investors with a direct bearing on attraction of new foreign direct investment.

Finance Minister Ishaq Dar, in a budget speech of 2017/18, said all the pending sales tax refunds with refund payment orders (RPOs) sanctioned by April 30, would be paid in two parts: up to the value of one million rupees by July 15 and the remaining above the value till August 14.

FBR has transferred around Rs24 billion worth of refunds to taxpayers’ bank accounts. Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said not all the refunds have been settled. 

“Despite finance minister’s assurance, the refund claims with RPOs issued before April are not paid as yet,” FPCCI official said. Exporters said the stuck refunds amounting to more than Rs200 billion were choking their liquidity and making it impossible for them to boost exports.