Government to settle Rs82bn tax refunds to resolve cashflow issues of businessmen
ISLAMABAD: The government on Thursday vowed to settle at least Rs82 billion worth of sales and income tax refunds in a week to resolve liquidity crunch and cash flow issues of trade and industry aggravated by the coronavirus lockdown, local media reported. Adviser to the Prime Minister on Finance and Revenue Hafeez Shaikh said the government wants to resolve the liquidity crunch, cash flow and other allied issues being faced by the industry and businesses. “Work in this direction has already started with the release of more than Rs115 billion of sales tax and income tax refunds as well as duty drawbacks held up for years,” Shaikh said, addressing an online meeting with industrialists and businessmen. The finance adviser said the government would study all the proposals. All the major issues faced by the industry and businesses would be resolved and a comprehensive relief package would be offered to the industry, he added. Shaikh told the meeting that the government had released Rs52 billion of the claimed refunds of Rs57 billion to exporters through the online system and Rs25 billion out of the Rs52 billion sales tax refunds for other sectors and industries. The remaining would also be cleared within next one week. Similarly, the government also cleared about Rs30 billion tax refunds under the drawback of local taxes and levies, while Rs15 billion duty drawbacks were paid. “Not only this, the government has also decided to pay within the next week all income tax refunds held up since 2014 and this measure alone would benefit nearly 100,000 taxpayers who would be paid over Rs50 billion worth of refunds,” he said in a statement. Businessmen and industrialists called for an inclusive relief package to address the needs of the large-scale as well as small and medium enterprise sectors. The Economic Coordination Committee (ECC) of the Cabinet last month approved Rs75 billion to pay back sales and income tax refunds, duty drawbacks and customs duties, which are due for the last 10 years. The refunds were expected to help approximately 676,055 taxpayers. ECC further approved a supplementary grant of Rs30 billion for the ministry of commerce to pay back duty drawbacks to textile exporters in the current financial year to improve their liquidity position. The proposed payments were part of the emergency relief fund of Rs1.2 trillion to combat effects of coronavirus outbreak. Minister for Industries and Production Hammad Azhar, Adviser to the Prime Minister on Commerce and Investment Razak Dawood, FBR Chairperson Nausheen Javaid Amjad and senior officials of the finance division were present during the meeting.