Revenue authority holds Rs185bln refund cases: TDAP

KARACHI: The Federal Board of Revenue has issued only Rs15 billion against refunds of Rs200 billion, which negatively impacted production and the exports, SM Muneer, Chief Executive, Trade Development Authority Pakistan, said on Monday. He was talking to journalists at a reception at Korangi Association of Trade and Industry (KATI) office.
The TDAP chief said the government had chosen him for an increase in the exports and he completed one year at the office, but exports declined by 4.5 percent during that period. “Give me a level playing field,” he asked.
In the year 2014-15, Pakistan’s exports declined by 4.88 percent to $23 billion against 2.01 percent higher imports of $45 billion, leaving a gap of $22 billion.
There were dues of Rs200 billion of exporters towards the government, of which Rs120 billion sales tax refunds and Rs8.0 billion custom rebates were not paid, he said. In addition, Rs80 billion were stuck with the State Bank of Pakistan in terms of subsidy on value addition. “I have held several meetings with the Finance Minister Ishaq Dar and FBR chairman but the issue remains unresolved,” he said.
Last week, Muneer said, the FBR issued cheques of only Rs15 billion and rejected hundreds of cases. Refunds were pending for two years, why did they reject now?
On the other hand, an FBR statement issued a few days back clarified that the Centralised Sales Tax Refund Office (CSTRO), FBR, had already issued cheques amounting to Rs13 billion during July and August 2015 as compared to Rs3 billion in July and August 2014, showing an increase of Rs10 billion or 300 percent. “The remaining claims could not be processed for the reason that the claimants had not submitted requisite documents. The refund cheques for the processed claims have been issued and the cheques for the claims processed in the last days of August are also under issue,” it said.
SM Muneer said gas and electricity shortage were major issues faced by the industries. Luckily, there was no load shedding of electricity in Lahore for a month but industries were being closed in Faisalabad because of the same issue.
“In Karachi, we are buying our own stolen water,” he said. This is the same situation with almost all industries in SITE industrial area, as water mafia was very much active there. “There are floods in the country, dams and rivers are full with water but we are purchasing our own water,” he said. His own exports declined by Rs1.00 billion from Rs3.25 billion per year.
Utility charges in Pakistan are the highest. With unavailability of funds and no profits there was lack of research and development and machinery, in such a scenario how does one compete in the world, he asked.
Muneer warned if exports were not increased and dollars did not come in the country through that channel, the government would have to look for loans and succumb to the demands of the lenders as “beggars have no choice”.
He said that 10 groups of all export sector representatives would meet with Prime Minister Nawaz Sharif in Islamabad on Thursday and would discuss matters related to the industry along with withholding tax on banking transactions. “If FBR is not supportive, I will leave this position, as it will not work out,” said the TDAP chief.
Gulzar Firoz, former president KATI, said he was in the leather business and it was a routine of the government to rebate leather industry before Eidul Azha, so that they purchase the skins, but no refunds were released this year. “We do not have funds and purchases will be low this year,” he said.
Senator and former KATI president Abdul Haseeb Khan said that Pakistan’s 75 percent demand of medicines was being fulfilled from Karachi, of which 50 percent supplies came from the Korangi industrial area alone.
He said industry was responsible for the law and order situation, as it provided employment to the poor and needy people. “If industry does not work and does not provide employment the poor and needy people will go on roads and snatch mobile phones,” he said.
Rashid Ahmed Siddiqui, president KATI, said there were 4,500 factories in the Korangi industrial area with leading refineries, pharma and textile companies. These industries provided Rs300 per day in terms of various taxes and levies in the government exchequer.
Johar Ali Qandhari, former president and chairman media committee of KATI, welcomed the journalists. Secretary Karachi Press Club AH Khanzada along with other office bearers and members of managing committee also attended the reception.