KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has called on the Federal Board of Revenue (FBR) to expedite the settlement of long-outstanding income and sales tax refund claims totaling Rs96.6 billion, warning that delays are adversely affecting liquidity and the investment climate for foreign businesses in Pakistan.
In a letter addressed to FBR Chairman Rashid Mahmood Langrial, OICCI acknowledged recent progress by the tax authority but stressed that a significant backlog remains. According to the chamber, as of September 2025, Rs62.2 billion in income tax refunds and Rs34.4 billion in sales tax refunds are still pending.
“We value FBR’s ongoing efforts to address refund claims and recognize progress made in recent months. However, despite these steps, total outstanding claims for OICCI members remain substantial at Rs96.6 billion,” the letter stated.
OICCI, representing over 200 multinational companies across various sectors, regularly engages with the government on matters affecting foreign investors, including fiscal policies and regulatory frameworks. The chamber emphasised the need for a transparent, time-bound mechanism to process tax refunds, warning that prolonged delays and fiscal uncertainty continue to hinder business operations.
OICCI Chief Executive and Secretary General M Abdul Aleem noted that delays in releasing refunds disrupt business planning for member companies, many of which are leading multinational investors. “Their sustained contribution to the economy through capital investment, job creation, and technology transfer requires a business environment where fiscal commitments such as tax refunds are honoured promptly and systematically,” the letter added.
The correspondence, also shared with Finance Minister Muhammad Aurangzeb, Board of Investment Secretary Capt (R) Muhammad Mehmood, and OICCI President Yousaf Hussain, stressed that timely resolution of these claims is crucial for improving the ease of doing business and attracting further foreign investment.
According to OICCI, 74 member companies primarily based in Karachi, with some in Islamabad and Lahore currently have pending refund claims. These firms span sectors including power, chemicals, and manufacturing, with notable names like K-Electric among them.
While FBR’s automation initiatives have improved documentation and procedural efficiency, businessmen note that meaningful relief in clearing refunds remains limited. “The final decision still rests at the top, tied to broader fiscal management. Refund delays are often used as a tool to manage budget constraints,” said one official requesting anonymity.
Despite paying nearly Rs10 billion in taxes daily, OICCI members say retrieving refunds is often challenging. Delays create liquidity issues and harm Pakistan’s reputation internationally, particularly at corporate headquarters in Europe and the U.S.
Bureaucratic inefficiencies remain a concern. “FBR is a large organisation where one hand often doesn’t know what the other is doing,” the official remarked, noting that departments tend to focus on daily revenue targets rather than the broader business environment.
The official highlighted the recent exit of Procter & Gamble (P&G) from Pakistan as a cautionary tale. While the departure was largely linked to business and currency factors, it underscores the challenges multinationals face in an unpredictable environment. “When P&G entered Pakistan, the dollar was Rs60. Today it is around Rs280. Global CEOs find it difficult to justify such instability to shareholders,” he explained. “While products may still be available through other channels, the loss is in technology transfer, training, and capacity building that multinationals bring.”
OICCI’s letter makes it clear that a structured, timely tax refund system is critical to sustaining foreign investment and supporting Pakistan’s long-term economic growth.
