ISLAMABAD, Aug 3: The tax authorities have withheld a sum of around Rs40 billion against refund payable to major exporters and taxpayers across the country during the fiscal year 2006-07.
Well-placed sources told Dawn on Friday that the issue of pending refund was taken up in a recent meeting, headed by chairman Federal Board of Revenue (FBR) M Abdullah Yousuf.
Though the government claims to have crossed the Rs841 billion mark revenue collection during 2006-07, it was at the same time claiming to have paid out maximum refund to taxpayers during the year under review.
Sources said in case refunds were not withheld, it would not be possible for the FBR to achieve the target of Rs835 billion set for the year 2006-07.
The sources said the income tax department had withheld an amount of around Rs7.3 billion refund of the taxpayers during the year under review.
Maximum refund had been doled out to taxpayers during the outgoing fiscal year.
The sources said sales tax department had withheld around Rs35 billion refunds of taxpayers in a bid to reach close to the downward revised target of Rs311 billion set for the fiscal year 2006-07.
If this amount is detected from the total sales tax collection, the net collection would remain much behind the target, added the sources.
“Only around Rs3 billion refunds have been released during the first month of the current fiscal year,” the sources said.
It shows the trend in the growth of revenue collection from the start of the year.
The sources said that advance tax collection is another big challenge for the tax department, which recorded a growth of around 80 percent, which has been raised to achieve the target.
According to the sources, exporters have asked the tax authorities that they could produce documentary evidence of the refund withheld by the tax authorities during the year under review.
The exporters were of the opinion that they were facing financial crunch in the market as the tax authorities have withheld their due refund due to which they could not carry out further export of commodity, which might harm their contracts with buyers. They demanded of the government to expedite release of the refunds to exporters.