Karachi, February 17, 2025 – The Pakistan Business Council (PBC) has urged the Federal Board of Revenue (FBR) to revise and increase the refund processing limits for exporters to facilitate business operations and improve liquidity.
In an official letter addressed to Dr. Najeeb Ahmad, Member Inland Revenue – Policy, the PBC referenced their earlier correspondence dated November 11, 2024. In that letter, the PBC commended the FBR for issuing SRO 1507(1)/2024 on September 24, 2024, which extended the FASTER-based sales tax refund system to all exporters.
However, the PBC also expressed significant concerns regarding the disparity in refund limits. The council pointed out that refunds for exporters outside the former zero-rated sectors were capped at 5% of export proceeds, whereas exporters within those sectors enjoyed a 12% limit.
“We had requested a uniform increase in the refund processing limit to 12% for all exporters, ensuring a level playing field across the board,” the PBC highlighted in their recent communication.
The PBC further noted that rather than addressing their concerns, the FBR implemented a reduction in the refund processing limit for exporters outside the zero-rated sectors, lowering it to 3% as of January 2025. This reduction, according to the PBC, has intensified the challenges faced by exporters, including prolonged delays, constrained working capital, and the increased administrative burden associated with manual refund processing beyond the newly imposed cap.
The PBC stressed that such limitations could hinder the competitive edge of Pakistani exporters in the global market. “The reduction has placed undue financial strain on exporters, disrupting their cash flows and affecting their operational efficiency,” the council asserted.
In light of these concerns, the PBC has formally requested the FBR to reconsider and revise the existing restrictions. The council has called for restoring parity by raising the FASTER-based refund processing limit to 12% for all exporters, irrespective of their sector classification.
The PBC believes that aligning the refund limits will foster fairness and support the growth of Pakistan’s export sector, ultimately contributing to the country’s economic stability and international trade performance.
