The Pakistan Business Council (PBC) has urged the Federal Board of Revenue (FBR) to improve the efficiency of sales tax refunds for exporters. Here’s a breakdown of their key recommendations:
Universal Access to FASTER for Sales Tax Refunds:
- Currently, only a limited number of export sectors can leverage the FASTER system for automated sales tax refund processing.
- The PBC proposes extending FASTER access to all exporters, regardless of their category. This would streamline the refund process and potentially reduce turnaround times.
Addressing Provincial Sales Tax Input Adjustments:
- The PBC has identified an issue with the FASTER system’s treatment of provincial sales tax on services.
- Exporters are reportedly unable to claim input adjustments for these taxes despite legal provisions allowing such claims.
- The PBC recommends modifying FASTER to permit verified input adjustments for provincial sales tax, ensuring a more accurate tax calculation for exporters.
Potential Benefits of Wider FASTER Adoption:
- Expanding FASTER access could expedite the refund process for all exporters, potentially boosting their cash flow and competitiveness.
- Streamlining the system with proper verification might also reduce the risk of misuse associated with manual processing.
PBC’s Call to Action:
- The PBC has requested the FBR to amend the relevant Sales Tax Rule (39B) to allow all exporters into the FASTER system.
- Additionally, they advocate for system modifications to enable verified input adjustments for provincial sales tax on services.
Looking Forward:
The PBC’s recommendations aim to enhance the efficiency and fairness of the sales tax refund process for Pakistani exporters. By facilitating faster refunds and addressing input tax concerns, these changes could contribute to a more supportive business environment for export-oriented industries.
