KARACHI: Multinational firms have asked the Federal Board of Revenue (FBR) to settle their “long pending tax refunds” on a priority basis.

       In a recent letter to FBR Chairman Asim Ahmad, the representative body of foreign investors operating in Pakistan demanded that its members’ pending tax refunds — which amounted to Rs93 billion at the end of June — be settled urgently.

       Of the Rs93bn figure, Rs53bn constitutes income tax refunds while Rs40bn accounts for sales tax refunds.

       A tax refund is a payment to the taxpayer after it has paid to the government more tax than it owes.

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       Businesses have routinely accused tax authorities of collecting and withholding more-than-due taxes in order to meet their revenue targets.

       Members of the Overseas Investors Chamber of Commerce and Industry (OICCI) are under “considerable financial pressure” owing to unreasonably high tax rates, especially after the 2023-24 fiscal measures, said body’s chief executive M. Abdul Aleem in his letter.

       New fiscal measures have increased the effective tax rate of OICCI members to over 40pc. Higher taxes have been imposed amid “super high” inflation and interest rates while economic growth is barely positive or partially negative, he added.

       Published in Dawn, August 4th, 2023