ISLAMABAD: The Senate Standing Committee on Finance and Revenue questioned delays in tax refund payments after the Federal Board of Revenue (FBR) briefed lawmakers on its refund retention limit under the International Monetary Fund (IMF) programme.
The committee learned that the FBR could retain up to Rs390 billion in tax refunds at a time. Senators raised concerns about the financial impact of delayed payments on businesses and taxpayers.
During the meeting, a company representative told the committee that the business had been waiting six years for tax refunds exceeding Rs270 million.
The committee expressed concern over the prolonged delay and directed the FBR to resolve the matter within one month. Officials were also instructed to release legitimate refunds and submit a progress report within 30 days.
FBR officials reported that approximately Rs197 billion in tax refunds had been issued during the first two months of the current fiscal year, compared with Rs157 billion during the same period last year.
The authority also said it paid around Rs500 billion in refunds during the previous fiscal year.
Officials informed lawmakers that a first-in, first-out system was being used to process refund claims, aiming to improve transparency and reduce discretion.
Senators called for greater oversight of the refund process and requested details of tax refunds issued over the past five years.
The committee also reviewed other financial matters, including honoraria for medical staff deployed during the budget session and the implementation of a State Bank of Pakistan foreign exchange circular.
Further discussion on the foreign exchange issue was deferred due to legal and contractual complications.
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