The Federal Board of Revenue (FBR) has often been accused by traders and exporters for not clearing their tax refund dues, but their concerns have not gone unnoticed. From July last year to February 2020, FBR cleared over 3400 tax refund claims of exporters and traders, which for both FBR and the traders, is a very significant step.

Traders and exporters have often clashed with the government over these refunds; the argument is that exporting capabilities are limited when they are missing a big chunk of their funds due to FBR’s failure to provide refunds. Naturally, both the running costs of a business and the profit margin take a hit as a result.

The traders are not wrong to demand tax refunds, specifically because failing to pay them by the government will only encourage those that look to dodge taxes, and give them ammunition against the whole tax collection exercise. By paying an estimated Rs70 billion during the last six months, the government has essentially indirectly facilitated all manner of exports, and hopefully the traders will capitalise on this as soon as possible.

Unfortunately, given that the world is currently grappling with a pandemic, the benefits of the FBR’s move might not be immediately noticeable. Borders are on lockdown; offices are closed globally and trade routes are no longer moving the same volume of commodities as before.

What is likely is that we will not see any evidence of improved export capability for the next few weeks, or at least until most markets move towards a sense of normalcy once the panic buying and the heavy quarantine in countries comes to an end. But this means that traders in the meanwhile should keep their cash reserves ready, keep meeting costs and look to export whenever the next opportunity presents itself.