ISLAMABAD: Pakistan’s Federal Board of Revenue (FBR) has been directed to introduce immediate corrective measures after the Federal Tax Ombudsman identified flaws in its FASTER sales tax refund system, saying the shortcomings are affecting exporters and reducing the efficiency of the automated refund mechanism.
The observations were made by Federal Tax Ombudsman Zafar Hijazi while deciding complaints filed by a company regarding delays and issues in the processing of sales tax refunds through the FASTER system.
According to the ruling, the existing system is unable to distinguish between commercial export goods declarations and non-commercial sample exports, creating difficulties in the automated processing of refund claims. The ombudsman noted that this technical limitation has the potential to delay or complicate legitimate refund payments for exporters.
The decision emphasized that the FASTER system was introduced to ensure quick, transparent, and automated sales tax refunds for exporters, reducing manual intervention and improving overall efficiency. However, the identified flaw is preventing the system from achieving its intended objective in certain cases.
The Federal Tax Ombudsman instructed the FBR to review the system and implement immediate technical improvements so that different categories of exports can be accurately identified and processed. The ruling stressed that an effective automated refund system is essential for supporting exporters and maintaining confidence in Pakistan’s tax administration.
Experts believe that timely tax refunds play a vital role in improving exporters’ cash flow and enhancing the country’s export competitiveness. Delays in refund processing can place additional financial pressure on businesses, particularly those that rely on consistent export operations.
The FBR has not yet issued an official response to the ombudsman’s findings. However, the decision is expected to prompt the tax authority to examine the identified shortcomings and introduce necessary upgrades to the FASTER system. The proposed improvements aim to ensure more accurate refund processing, reduce unnecessary delays, and strengthen the efficiency of Pakistan’s automated sales tax refund mechanism for exporters.
