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budget proposals

Foreign investors demand pending refunds payment in six months

KARACHI: Foreign investors operating in Pakistan have demanded to clear all pending sales tax refunds in next six months.

Overseas Investors Chamber of Commerce and Industry (OICCI), the representative body of foreign investors, in its proposals for budget 2021/2022 demanded that all pending tax refund be cleared within next six months in an orderly/ prearranged manner.

The OICCI further suggested that verification process for refunds should start automatically as soon as an application for refund is filed by the taxpayer and tax refunds should be cleared within 45 days.

With introduction of MIS on IRIS, it has become easy to introduce an online self-verification of refund. Wherein taxpayer after applying for refund verification us 170 may be given an option to select CPRNs online against each section wherein tax deduction/ collection has been made and create a virtual verification file for easy processing by assessing officers. In case of any discrepancy, only missing CPRNs will be verified manually.

It is suggested that inter adjustment of Income tax and Sales tax refunds should be made part of the law.

A timely settlement of the determined refunds should be made, and if there is a liquidity issue then issuing marketable government bonds/ securities be considered.

Amend current fixed interest rate of 10 percent to floating interest rate linked with KIBOR, it is suggested.