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Textile Exporters Criticise FBR For Delay In Tax Refunds Release

The Pakistan Hosiery Manufactures and Exporters Association (PHMA) has said that the Federal Board of Revenue’s commitment to instantly release exporters’ tax refunds is just ‘eyewash’.

A news report in Express Tribune cited PHMA Central Chairman Salamat Ali as expressing his disapproval over the imposition of 17% general sales tax on the ‘zero-rated’ textile sector.

He also criticised the delay in release of tax refunds despite the fact that FBR had introduced the new Fully Automated Sales Tax e-Refund (FASTER) system.

Members of the industry have however turned the system slower. The PHMA central chairman complained that as opposed to FBR’s claim of disbursal of tax refunds after 72 hours of refund claim submission, even after 100 hours the refunds had not been received.

Presently, billions of rupees of exporters in sales tax refund have been stuck with FBR, as a result the textile sector is facing difficulties in purchasing inputs for manufacturing export goods.

Moreover, Ali stated that the exporters’ running capital was shrinking due to pending refunds as they were forced to buy raw material on credit.

Exporters in the textile sector used to previously buy local inputs at zero sales tax.

The PHMA central chairman demanded that the government should honour its commitment and ensure the quick payment of tax refunds along with the restoration of the zero-rated sales tax system.

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