Rs250bln tax refunds settled in six months

KARACHI: The Federal Board of Revenue (FBR) has settled Rs250 billion of sales tax refunds during the past six months owing to its automated system that will soon be emulated for adjusting income taxes, a senior official said on Saturday.

FBR Member Inland Revenue Operations Ashfaq Ahmed said the fully-automated sales tax e-refund (Faster) plus is one of the best systems of the world through which the claims are processed within 42 to 72 hours.

“Although things are improving and we are trying our best to facilitate the taxpayers the country deserves a much better public finance system,” Ahmed said during his visit to the Karachi Chamber of Commerce and Industry (KCCI). “There is a realisation now to broaden the tax base which will ease pressure on existing taxpayers.”

The FBR official said a system for the faster clearance income tax refunds similar to the Faster plus is also under development. The Faster plus has fully addressed all kinds of interruptions and issues which were suffered by the taxpayers in the previous system. The system has eight checks before processing the refund claims.

“I can assure you that we have reviewed such products of all regional countries but the Faster plus is better than any regional country and is one of the best refund systems in the world,” he reiterated.

On video surveillance rules, Ahmed said this is in favour of the industrialists as it would avoid human intervention which usually leads to malpractices.

“As technology is the only solution, we decided to implement video analytics and it is heartening to see that many industries from different sectors want to get the video analytics implemented in their business premises at the earliest,” he said. “This technology would electronically transmit data to the control room at the FBR’s head office which would electronically aggregate all the details and transform the info into numbers.”

The FBR official said they are not responsible for formulating laws and policies.

“We are just an enforcement outfit,” he said. “All the legal points and policy-related issues must be raised in front of the parliamentarians and we will also forward them but eventually the parliament is empowered to amend laws.”

Businessmen Group Chairman Siraj Kassam Teli said the video surveillance system implemented by the FBR might be a good system, but it is not a wise move and the FBR is unlikely to achieve the desired results.

“Due to trust deficit between the FBR officials and taxpayers, the business and industrial community fears that this initiative would open more avenues for corruption,” said Teli. “Such computerised system has been introduced in the past which worked perfectly well in the beginning and efficiently dealt with corruption but later on, such system was deliberately altered and modified so that the corrupt officials could get an opportunity to harass taxpayers to gain personal benefits.”

Teli, who is also the former president of the KCCI, said the tax theft could not be done alone and it is done in connivance with FBR officials who even suggest tax dodging measures.

“It is really unfortunate that no mechanism exists to take action against such corrupt officials and it is the taxpayers who face immense hardships because of notices and litigations,” he said.

The veteran trader said approximately Rs1.9 trillion worth of refunds are stuck in litigations. He advised that the FBR must form a committee comprising reputable businessmen, experts and honest FBR officials who must sit together and categorise all these cases into 3 to 4 categories.

The first category should hold cases related to fake businesses. The second includes the cases trapped into litigations by officials to achieve the target. The third category should include genuine tax matters, which should be referred to alternate dispute resolution committee to promote out of court settlements.

“Due to coercive nature of the regulatory regime, the number of taxpayers has shrunk from 2.8 million to 2.4 million,” said Teli.