ByKarachi, Pakistan: The Federal Board of Revenue (FBR) has raised concerns over increasing delays in the processing of sales tax refunds, highlighting inefficiencies in the system despite handling a higher volume of claims.
A recent report by the FBR shows that the average time required to process sales tax refunds through the FASTER system has surged to 119 days in the fiscal year 2023-24, compared to 44 days in 2020-21. While the number of processed refund orders grew from 33,013 in FY 2021 to 40,447 in FY 2024, the extended processing timelines reveal significant inefficiencies.
The report indicates a steady increase in processing times over the years. After a marginal improvement from 44 days in FY 2021 to 40 days in FY 2022, the average time rose to 64 days in FY 2023 and then sharply to 119 days in FY 2024. This alarming trend underscores the pressing need for system improvements to enhance efficiency and reduce delays.
On the other hand, income tax refunds showed mixed progress. While the number of processed orders dropped from 53,583 in FY 2021 to 13,366 in FY 2024, there has been some improvement in processing times. Refund timelines fell from 598 days in FY 2021 to 364 days in FY 2022. However, they climbed again to 566 days in FY 2023 before improving slightly to 448 days in FY 2024.
These fluctuations reveal inconsistencies in the system’s ability to manage tax refunds efficiently. While some strides have been made, particularly in income tax refunds, the persistent delays in sales tax refunds require urgent reforms. Enhanced technological solutions and streamlined processes are essential to address these issues and build trust among taxpayers.
The FBR’s findings stress the importance of addressing these challenges to ensure a more reliable and timely refund system, ultimately providing taxpayers with a smoother experience.
