The Federal Board of Revenue (FBR) reported a slight decline in income tax refunds for the fiscal year 2023-24. The FBR paid out Rs. 53.13 billion in income tax refunds, marking a 1.7% decrease from Rs. 54.07 billion in the previous fiscal year.
Despite the decline in income tax refunds, overall refunds and customs rebates saw a substantial increase. The FBR recorded total refunds and rebates at Rs. 482.4 billion for FY24, a 29.6% rise compared to last year’s figures. This increase highlights the FBR’s efforts to boost rebates for businesses and exporters to support economic activity.
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Support for Exporters and Trade
The FBR attributed the rise in customs rebates to increased support for exporters. By providing higher rebates, the FBR aims to stimulate exports and improve trade balances. The agency noted that timely rebates are essential for enhancing export competitiveness and addressing cash flow issues for exporters.
Strategic Shifts in Tax Policy
The FBR has adjusted its tax and rebate policies to balance revenue collection and economic support. While tax refunds declined slightly, the increase in rebates demonstrates a strategic shift toward incentivizing exports. Officials mentioned that the FBR is working on further policy adjustments to optimize collections and facilitate businesses.
Economic Implications
The decline in income tax refunds indicates stricter refund policies, while the rebate rise reflects the government’s focus on trade support. This approach seeks to balance budget requirements with economic growth, positioning the FBR’s rebate policy as a key component of Pakistan’s export strategy.
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