FBR develops new refund system to boost exports

ISLAMABAD: The Federal Board of Revenue (FBR) has developed and placed new refund payment system known as FASTER and it will be launched on Tuesday (today) for release of multi-million rupees reconciled refunds to exporters.

“Yes we have placed FASTER and first batch of refunds worth millions of rupees will be released to exporters today especially for those five major export oriented sectors including textile where zero rating regime was abolished in the budget for 2019-20”, top official sources confirmed while talking to The News here on Monday.

The total demand of refunds has been amounted to Rs1.2 billion but the reconciled amount would be standing into millions of rupees that would be released through FASTER system.

The success of abolishing zero rating regime for five export oriented sectors largely dependent upon the ability of the FBR for placing an effective IT based system for release of refunds of exporters. The exporters were apprehensive regarding the capacity of the FBR for releasing of refunds by arguing that it might result into stuck up of billions of rupees funds and result into creation of liquidity crunch for exporters.

However, the FBR has now developed its new system FASTER and it is going to be functional from today with the expectation that the FBR will be able to run the automatic release of genuine refunds on one side but it will also place such safeguard mechanism that will not allow flying/fake invoices in anyway.

The stuck up refunds had become major headache for exporters in the past as the FBR used to withhold refunds amounts to inflate its revenue collection figure but it resulted into escalating the cost of doing business in Pakistan. The exporters became uncompetitive because of stuck up refunds.

With massive devaluation and other measures, the exports could be given boost in months and years ahead if the refunds mechanism runs in smooth manner. But if it hits any hitch then both exports and revenues will be at stake.