FBR To Clear Rs126 Billion In Pending Refunds And Rebates

The Federal Board of Revenue (FBR) has agreed to release around Rs83 billion in long-pending income tax refunds and another Rs43 billion in outstanding rebates within the next two to three months.

The decision was reached during a meeting between FBR Chairperson Rashid Mahmood Langrial and office-bearers of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), held under Prime Minister Shehbaz Sharif’s instructions for regular monthly engagement with Karachi’s business community.

FPCCI Senior Vice President Saqib Fayyaz Magoon said the FBR chairperson accepted several proposals presented by the business community and directed relevant officials to take action.

According to the decisions, approximately Rs83 billion in old income tax refunds will be cleared within two to three months. Refund Payment Orders (RPOs) issued since August will be paid immediately, while around Rs43 billion in pending rebates will also be settled during the same period.

The meeting also discussed concerns regarding the Export Facilitation Scheme (EFS), particularly the 10% value-addition requirement. The FBR clarified that the condition relates to exports of finished goods rather than the import of industrial raw materials.

Under the revised approach, exports will not be blocked simply because the required 10% value addition has not been immediately demonstrated. Goods Declarations will be allowed to move forward, while value addition, production expenses and export valuation will be examined at a later stage.

The issue of pre-arrival filing of Goods Declarations was also taken up. The FBR agreed in principle that the Funds Identification condition imposed by banks should instead be verified at the out-charge stage. Amendments to relevant State Bank regulations will also be considered to enable pre-arrival filing and shorten customs clearance times.

Langrial further directed officials to reduce the deadline for resolving classification disputes from 120 days to 90 days. Issues involving tax exemption anomalies under the Fifth Schedule will be reviewed in consultation with the concerned government departments.

The FBR also agreed to complete low-risk sales tax registrations within one week. For high-risk cases, verification will be obtained from relevant trade associations to help speed up the registration process.

FPCCI representatives also called for the removal of differences between industrial and commercial importers of raw materials. Langrial said the proposal would be presented before the FBR Board for consideration.

The meeting also examined the slow implementation of the small traders’ registration scheme. So far, only around 3,800 to 5,000 traders have registered, compared with the government’s target of bringing one million small traders into the tax system.