The Senate Standing Committee on Finance and Revenue convened Wednesday in Islamabad under the chairmanship of Senator Saleem Mandviwalla to review issues related to tax refunds, business migration, and taxation policies. The meeting was attended by Senators Farooq Hamid Naek, Syed Faisal Ali Subzwari, Faisal Vawda, Munzoor Ahmed, and Abdul Qadir. Senator Mohsin Aziz participated virtually.  A key agenda item was the delay in the export and other sales tax refunds.

Chairman Committee Saleem Mandviwalla expressed deep concern, stating, “Many complaints on non-refund of sales tax have been received. Refunds are to be made within 72 hours; however, months have now passed in many cases.” He further added, “Either stop the policy or manage it properly—and identify the problem.”  FBR officials informed the committee that all verified outstanding sales tax refunds in five major export-oriented sectors—textiles, leather, sports goods, carpets, and surgical goods—have been disbursed through the FASTER (Fully Automated Sales Tax e-Refund) system.

They reported no current pendency of valid claims under the FASTER stream, with refunds being issued on a regular monthly basis.  According to the FBR, from July to April of the current fiscal year (2024–2025), a total of *Rs. 317.41 billion* was disbursed against *33,204 Refund Payment Orders (RPOs)* via the FASTER system.  Despite the FBR’s claims, Senator Mandviwalla raised alarm over the food export sector, which contributes *\$4.8 billion* in exports, noting that its sales tax refunds have not yet been released.

He urged the FBR to restructure refund disbursements based on a sectoral priority framework. FBR officials responded that refunds for the food export sector are expected to be released by *Friday. They added that all **72 export sectors* under the FBR's jurisdiction are being considered in the refund process.  The Chairman also directed the Federal Board of Revenue (FBR) to submit a comprehensive report detailing all outstanding refunds, including timelines, affected sectors, and the reasons for delay. 

Another major concern highlighted during the meeting was the *increasing migration of Pakistani businesses to Dubai, allegedly driven by high tax rates and stringent regulations. The committee was informed by FBR officials that this trend has been officially acknowledged. Chairman Mandviwalla emphasized, *“Instead of trying to get Dubai-based businesses liquidated, we must provide better facilities and incentives for businesses to stay and grow in Pakistan.” 

FBR officials further briefed the committee that *property tax rates for non-filers now range between 5% and 35%, acknowledging that the current tax regime imposes a heavy burden. *“It is acknowledged that taxes are being implemented very heavily,” they admitted, while clarifying that the FBR is responsible only for collecting the taxes that are legislated. “Whatever tax is levied will be collected,” officials stated.  Due to the absence of several members, and the Federal Minister for Finance, the remaining agenda items were deferred to the next scheduled meeting.

Credit: Independent News Pakistan (INP)