Foreign investors urge FBR to clear Rs108bn in pending tax refunds

Foreign investors have urged the Federal Board of Revenue (FBR) to address the growing backlog of tax refund claims, which has surged to Rs108 billion. 

They argue that resolving these claims is essential for maintaining the confidence of current and prospective investors in Pakistan. The outstanding refunds involve income and sales taxes owed to foreign companies operating in the country. 

According to a letter from Abdul Aleem Khan, Secretary General of the Overseas Chambers of Commerce & Industry (OCCI), to FBR Chairman Rashid Mahmood Langria, the backlog of tax refunds is placing significant strain on the liquidity and cash flow of multinational corporations (MNCs) in Pakistan.

As of July 31, 2024, pending tax refunds for OICCI members totalled Rs108 billion, with Rs51 billion related to sales tax and Rs57 billion to income tax. This represents a 15% increase from Rs94 billion in February 2024, reflecting a troubling upward trend.

The OICCI highlighted that earlier efforts by the Board of Investment (BOI) to expedite these refunds through engagements with the FBR in March and April 2024 have not led to significant progress.