ISLAMABAD: The Federal Board of Revenue (FBR) conceded on Thursday it withheld refunds worth Rs88 billion to show feel-good figures of revenue collection during this fiscal year.

The revelation was made by FBR Chairman Nisar Muhammad Khan before the newly constituted National Assembly Standing Committee on Finance headed by its chairman, MNA Qaiser Ahmad Sheikh.

Mr Khan informed the committee that the tax machinery has so far paid Rs23bn under the head of sales tax refunds this fiscal year as against Rs16 paid during the comparable period of last year, reflecting an increase of 13 per cent.

He said growth in refunds came despite the fact that the country’s exports witnessed a double-digit fall during the period.

Elaborating further, he said the stuck-up refunds include Rs24bn in exports proceeds, while the rest was related to power distribution companies (Discos) and other domestic sectors. “We are still working to ascertain whether or not the claims of pending Rs88bn are genuine,” he added.

He said sales tax collection fell because of decline in international oil prices. The government’s commitment with the IMF to maintain performance on certain revenue indicators was making it difficult for the FBR to clear the entire backlog of refunds, he added.

Finance Minister Ishaq Dar, who joined the committee later on, endorsed the opinion of the FBR chairman on pending refunds and said it was not possible to clear all refunds in one go. “The amount to be cleared as refund will have to be adjusted in the divisible pool funds,” he said, adding that it might not be acceptable to the provinces as well.

The minister said that he has managed to secure another $900 million loan from the World Bank which would help boost country’s foreign exchange reserves.

Dispelling the impression that the rupee is overvalued, Mr Dar said there was no need to depreciate the local currency amid lack of surpluses available for exports.

On the farmers support package, the committee directed the relevant official to bring a breakdown of the whole scheme in the next meeting.

Interestingly, the Kissan package of Rs347bn also includes measures taken in the budget of 2015-16. Moreover, the committee members also suspected certain trickery in the scheme and sought explanation from the Ministry of Finance on it.

Published in Dawn, November 27th, 2015