Karachi, January 8, 2025 – The Federal Board of Revenue (FBR) has highlighted a concerning rise in delays for processing sales tax refunds, signaling inefficiencies in the system despite an increase in processed claims.
An FBR report reveals that the average time for processing sales tax refunds through the FASTER system surged to 119 days during fiscal year 2023-24, compared to just 44 days in fiscal year 2020-21. The number of processed refund orders rose from 33,013 in FY 2021 to 40,447 in FY 2024. However, the time taken to process these claims has shown a troubling upward trend.
According to the FBR, processing time improved slightly from 44 days in FY 2021 to 40 days in FY 2022 but then spiked to 64 days in FY 2023 and further to 119 days in FY 2024. This sharp rise underscores growing inefficiencies, despite the increased volume of processed claims. The report emphasizes the need for system optimization to streamline refund processing and enhance efficiency.
In contrast, the FBR reported notable progress in processing income tax refunds. Although the number of processed orders decreased significantly from 53,583 in FY 2021 to 13,366 in FY 2024, the time taken for processing has shown some improvement. Refund processing times dropped from a staggering 598 days in FY 2021 to 364 days in FY 2022. However, this was followed by an increase to 566 days in FY 2023 before improving again to 448 days in FY 2024.
These fluctuations in processing times for both sales tax and income tax refunds highlight inconsistencies in the system’s efficiency. While some progress has been made in streamlining operations, the delays in sales tax refunds, in particular, call for urgent reforms and technological advancements to meet taxpayer expectations and maintain trust.
The FBR’s findings emphasize the importance of addressing these systemic issues to improve overall refund processing timelines and ensure a smoother experience for taxpayers.