FBR's online refund payment system is a failure: PHMA

The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) on Saturday expressed its disappointment at the performance of the Federal Board of Revenue's Fully Automated Sales Tax e-Refund (FASTER) System and called for a new and fool-proof system for full and speedy payment of refunds.

            Economy will weaken if financial policies are not reviewed

The association said the FBR has yet to honour its commitment about releasing exporters' refunds within 72 hours. PHMA Vice Chairman Shafiq Butt criticised the Federal Board of Revenue for not issuing billions of rupees refunds to exporters despite promises and urged Prime Minister Imran Khan to direct the tax agency to remove bottlenecks in the new refund payment system of the FBR. He asked the PM to get his directives implemented on an immediate basis, as exporters are facing a severe liquidity crunch due to delay in payment of sales tax refunds despite launch of the new system by the FBR.

Butt said that FBR had claimed it would pay sales tax refunds through the newly installed Fully Automated Sales Tax e-Refund (FASTER) System to exporters of five sectors within 72 hours of submission of claims. However, at the initial stage exporters faced lots of hardship in filing their sales tax returns to get refund. They said that FASTER system is not working because ‘annexure H’ in the system has many flaws. He said that all these issues were shared with the relevant FBR authorities.

He also demanded a mechanism to find out the reasons for deferring up to 25 percent payment of exporters refunds under FASTER. The Automated Refund System should point out the reason as to why it is not making full payment and deferring 10 to 25 percent payment of the exporters while their documents are complete, he said.

He said the FBR has made partial payments against the sales tax refund claims and exporters are unaware as to why the FBR had withheld the remaining refund amount. This situation has created unrest among member exporters, he said. Exporters want to know why the sales tax refund payment has not been made and some amount of payment has been withheld without mentioning any reason, he said.

The PHMA vice chairman requested necessary instructions for reprocess of refund claims, which were rejected due to this technical issue. He said that despite repeated assurances, the system still has deficiencies, which make sales tax refunds impossible. The vice chairman said the government had made a commitment to expedite the payment of refund claims, but never fulfilled its promise.

He said that timely payment of refund claims is still a major issue and needs resolution on priority, as billions of rupees of exporters are stuck as sales tax refunds. He said that sales tax refunds amount has crossed volume of billions since the announcement of FBR’s new system in July last year after withdrawal of zero-rating regime.

He said that increase in exports of the country is a very important objective as far as improvement in economy of the country is concerned. He observed that it should be the utmost priority of the government to facilitate exporters in every possible way. He said that exporters are unable to procure and purchase raw materials and other accessories to fulfil their future export orders and this will ultimately collapse the entire export trade, he added. He warned that the economy can further weaken if the current financial policies are not reviewed immediately. He demanded that the FBR release all refund claims of the export sector at the earliest.