ISLAMABAD: In a bid to clear backlog of stuck up tax refunds of over Rs200 billion, the government is decided to launch three year negotiable security bond of worth Rs100 billion in different phases through State Bank of Pakistan (SBP).
For issuing of any negotiable security bond for clearing backlog of exporters worth billions of rupees in which the government would issue a paper empowering exporters to withdraw their amounts from the SBP, the government is also considering to bring amendments in the Sales Tax law for insertion of enabling clauses to make this mechanism operational. “The government is in catch 22 situation as on one side it wants to clear the backlog of exporters refunds while it also wants ballooning of owed by the government against the SBP,” said the official sources.
The Debt Office, Ministry of Finance, has clearly suggested to the FBR authorities that this kind of bond would increase government’s borrowings from the SBP as it fell under the jurisdiction of definition of debt owed by the government to the SBP. Now the FBR authorities, SBP and Ministry of Finance high-ups are expected to hold another meeting in coming weeks to finalise modalities to launch this bond that aimed at clearing major chunk of stuck up refunds of exporters. Because of these problems, the previous governments considered proposals to launch bond but dropped because of these problems emerged in the past. Pakistan’s exporting sector has been facing immense difficulties because of liquidity crunch owing to stuck up billions of rupees refunds. Although, the FBR high-ups denied but it is general perception that the payment of refunds were cleared after allegedly getting 30 to 40 percent commission amount on genuine claims. The issue of flying invoices in complete nexus with the FBR officials is another problem that had caused multibillion rupees scam at the cost of losses to the national exchequer.
