IMF asks Pakistan’s tax authority to provide comprehensive information on refund arrears to improve transparency and ease business liquidity pressures.
The International Monetary Fund has asked the Federal Board of Revenue to provide detailed information on pending tax refund claims as part of ongoing efforts to address liquidity pressures faced by businesses in Pakistan.
According to official details, the IMF directed the FBR to furnish itemized data on refund arrears related to general sales tax, income tax and customs duties.
Pakistan, which is currently operating under an IMF-supported loan programme, is required to comply with reporting obligations and transparency measures agreed with the lender. Under these requirements, the FBR will submit detailed monthly and quarterly data regarding outstanding tax credits across all categories of tax revenue.
The IMF has also sought information on the number of refunds processed automatically, the total value of automated refunds and offsets, and the average waiting time for taxpayers to receive refunds.
The move is aimed at improving transparency in Pakistan’s tax system and reducing delays in refund payments that often create liquidity and cash flow challenges for businesses and exporters.
According to the IMF, the ceiling on the net accumulation of tax refund arrears will apply to the cumulative flow of unpaid refund claims. The lender defined tax refund arrears as claims supported by required documentation that remain unsettled within a specified period after submission to the FBR.
Refund claims may be settled through direct cash payments, adjustments against tax liabilities, issuance of government bonds or promissory notes, or through official rejection of claims.
Data shared with the IMF showed that the stock of income tax refund arrears stood at Rs234.8 billion at the end of June 2025. The IMF said the net accumulation of income tax refund arrears would be measured against this baseline.
Similarly, sales tax refund arrears amounted to Rs155.5 billion at the end of June 2025, which will serve as the benchmark for monitoring future accumulation of pending sales tax refunds.
The latest IMF requirement underscores growing international scrutiny of Pakistan’s tax administration and the importance of timely refund settlements to support economic activity and business confidence.
