FBR allowed to retain Rs390bn in refunds, Senate committee told

The Federal Board of Revenue told a Senate finance panel on Thursday that the IMF programme lets it hold back up to Rs390 billion in refunds at any point, according to Dawn. The disclosure followed complaints about lengthy delays, and one senator questioned the years-long wait for refunds that the new system was expected to process within 72 hours. A chemical exporter, Oleocorp, said its refunds had been pending for six years, with more than Rs270 million still owed.

FBR officials said refunds of about Rs197 billion were issued in the opening two months of the current fiscal year, against Rs157 billion in the same period last year, a rise of Rs40 billion. They added that about Rs500 billion was paid out in the previous fiscal year and that refunds now follow a first-in, first-out sequence to limit discretion. The committee asked the FBR to release the pending refunds and then report within 30 days.

The panel also heard a State Bank of Pakistan briefing on paying interest or profit on foreign currency accounts. SBP Governor Jameel Ahmad said the matter is before the courts and involves signed contracts between the bank and depositors, so the panel postponed detailed discussion. The central bank was told to provide a written note that will help the panel determine its next step.