ISLAMABAD - The government on Thursday decided to clear sales tax refunds worth of Rs13 billion to facilitate trade, particularly exporters following healthy tax collection during first quarter (July-September) of the ongoing financial year.

Chairing a meeting held at Ministry of Finance, Finance Minister Ishaq Dar directed Federal Board of Revenue (FBR) to issue sales tax refunds by 31st October, 2017, against refund payment orders (RPOs) issued up to 31st August, 2017. Refunds of Rs 13 billion are involved in more than 4000 RPOs.

The FBR has already paid sales tax refunds amounting to Rs27.6 billion during the current financial year. These payments were made in pursuance of the announcement by the Finance Minister in the budget speech for the year 2017-18 that taxpayers’ long outstanding demand for payment of refunds will be soon addressed and the sales tax refunds against refund payment orders (RPOs) issued up to 30th April, 2017, shall be paid in two stages. Accordingly, payments against RPOs involving amount up to Rs1 million were made on 15th July, 2017, and for RPOs exceeding Rs1 million, the payments were made on 8th August, 2017.

Now, the government has decided to clear further tax refunds worth of Rs13 billion. The government is in position to clear the tax refunds following robust growth in tax collection during July-September period of the current fiscal year. The tax collection recorded growth of 20 percent and stood at Rs765 billion during July-September as against Rs634 billion during the same period of the previous year. The revenue collection trend during the first three months of the financial year augurs well for the efforts of FBR towards achievement of the assigned annual revenue targets.

Exporters are demanding of the government to clear tax refunds to increase country’s exports.

Finance minister said that the government is mindful of the problems being faced by the business and traders community on account of liquidity and keeping this fact in view he has given instructions for refunds. It may be added that the government has been able to contain the problem of refund pendency despite the increase in taxpayers’ number and increase in tax payments. FBR has been trying to facilitate the businessmen so that they are encouraged to pay their taxes.

The refunds shall be paid to all segments and sectors of registered persons including exporters, textile, etc. It may further be mentioned that as per practice adopted previously, all refund amounts shall be electronically transferred to claimants’ bank accounts through the State Bank of Pakistan. This measure, he said, is aimed at enhancing transparency and facilitation and reducing contact between tax collectors and the taxpayers.