Tax refunds amount to Rs532b: FBR.

ISLAMABAD -- The Federal Board of Revenue (FBR) on Thursday admitted the existence of a minimum Rs532 billionworth of tax refund claims and also conceded that Rs220 billion worth of 'administrative measures' were taken in the budget.

The tax refund claims had been outstanding on account of income tax, sales tax and customs duty for the period of June 2014 to June 2019, according to a briefing that the FBR gave to the National Assembly Standing Committee on Finance.

The Rs532-billion worth of tax refunds were the minimum as the FBR did not report the claims outstanding from before June 2014 and also for the period of July 2019 to June 2020.

The admission confirms the existence of yet another circular debt, like Rs2.1 trillion in the power sector, and also affirms that the FBR's tax collection was grossly over-reported.

FBR Member Policy Dr Hamid Atiq Sarwar disclosed that the government took Rs220 billion worth of measures in the budget, which he called administrative measures.

'Administrative measures of Rs220 billion have been taken in the budget,' said Sarwar.

The Express Tribune reported on June 12 that the government had imposed over Rs200 billion in new taxes but was not admitting it.

From June 2014 to June 2019, Rs413.5 billion of income tax refund claims had been outstanding, said FBR Inland Revenue Operations member Dr Mohammad Ashfaq. He said the outstanding sales tax refund claims amounted to Rs112 billion. Dr Tariq Huda, FBR member customs, stated that customs rebate claims amounted to Rs6 billion.

In fiscal year 2018-19, the total tax collection was Rs3.826 trillion and if we excluded Rs532 billion from it, the net collection stood at only Rs3.294 trillion. The Rs3.294 trillion was equal to just 8.6% of gross domestic product (GDP) of that fiscal year.

The FBR did not share tax refund claims data for fiscal year 2019-20. If one includes the 2019-20 estimated refund claims, the dues of taxpayers would be far higher than Rs600 billion. It is also a failure of the International Monetary Fund (IMF) that could not pick gross over-reporting of revenues. The Express Tribune had reported in April this year that the FBR was withholding a minimum Rs350 billion in income tax refunds.

The trend showed that like the Pakistan Muslim League-Nawaz (PML-N), the Pakistan Tehreek-e-Insaf (PTI) government too blocked the tax refunds to inflate its revenues.

During its five-year period, the PML-N government received Rs403.5 billion worth of income...