ISLAMABAD: After a delay of more than six years, the government has finally decided to release income tax refunds worth Rs50 billion to 100,000 taxpayers within the next week.

The income tax refunds were held up since 2014 to show good revenue collection figures at the cost of the taxpayers’ amount. “We will clear all income tax refunds,” a senior tax official told Dawn on Thursday.

However, he said the amount held up was spread over the past six years. “We pay refunds after verification and assessment of taxpayers’ payments”, he s8aid, adding it might take years before releasing them.

Normally, much of the talk revolves around the sales tax refunds and customs rebates, which are meant for industrialists.

However, income tax refund payments are not on the priority list of the Federal Board of Revenue and small taxpayers even avoid applying for them because of tedious procedure.

The FBR collects billions on mobile cards as advance income tax from people who do not fall under the tax bracket and therefore don’t file returns or get refunds.

This amount goes in billions which ended up in the government exchequer, the official admitted. “We have no other mechanism to retu­­rn to people without filing tax returns”, he said.

Meanwhile, in a virtual meeting with industrialists to resolve their liquidity issues, Finance Adviser Dr Hafeez Shaikh has asked FBR chairperson Ms Nausheen Amjad to ensure early release of due refunds.

An official statement issued after the meeting said the government has decided to pay within the next week all income tax refunds held up since 2014. He said the government has vowed to resolve the liquidity crunch, cash flow and other allied issues being faced by the industry and businesses.

To this end, the FBR has already started releasing more than Rs115bn of the sales tax and income tax ref­unds as well as duty drawbacks held up for years.

Brand condition relaxed

Meanwhile, the FBR has withdrawn the brand specification condition on import of goods for prevention and treatment of Covid-19.

Three different notifications were issued here to amend the earlier notification of March 20 to allow im­­port of certain goods without any brand specification. The exemption will now be available until June 30, 2020.

Through another income tax notification SRO315, with­holding tax is exempted on cash transfers under Ehsa­­as Emergency Programme.

Published in Dawn, April 17th, 2020