ISLAMABAD: Pakistan’s Federal Tax Ombudsman has identified shortcomings in the Federal Board of Revenue’s (FBR) FASTER Sales Tax Refund System and has directed the tax authority to take immediate corrective measures to address the issue.
According to the Ombudsman, the flaw is negatively affecting exporters and undermining the efficiency of the automated sales tax refund mechanism, which was introduced to expedite refund processing.
The observations were made in a decision issued by Federal Tax Ombudsman Zafar Hijazi while adjudicating complaints filed by a company regarding the operation of the FASTER refund system.
In his ruling, the Ombudsman stated that the current system is unable to distinguish between commercial export Goods Declarations (GDs) and non-commercial sample exports. As a result, the system may incorrectly process or delay legitimate refund claims.
The decision noted that this limitation in the automated system has created difficulties for exporters by affecting the timely settlement of sales tax refunds, an important source of liquidity for export-oriented businesses.
The Ombudsman observed that the inability to differentiate between commercial and non-commercial export transactions compromises the effectiveness of the FASTER system and may lead to unnecessary administrative complications for taxpayers.
Following the findings, the Federal Tax Ombudsman instructed the FBR to take immediate corrective action to rectify the identified flaw and improve the performance of the automated refund system.
The FASTER (Fully Automated Sales Tax e-Refund) system was introduced to accelerate the processing of sales tax refunds for exporters through an automated mechanism, reducing manual intervention and shortening processing times. However, the latest findings suggest that technical improvements are needed to ensure the system accurately identifies different categories of export transactions.
Tax experts have long emphasized that an efficient and reliable refund system is essential for exporters, as delays in refunds can affect cash flow, increase business costs, and reduce the competitiveness of Pakistani products in international markets.
The FBR has not yet issued an official response to the Ombudsman’s observations. It is expected to review the recommendations and implement the necessary technical and administrative changes to improve the functionality of the FASTER system and ensure that legitimate exporters receive their refunds without unnecessary delays.
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