Foreign Investors Urges FBR to Clear Rs96.6bn in Pending Tax Refunds

The Overseas Investors Chamber of Commerce and Industry (OICCI) has urged the Federal Board of Revenue (FBR) to expedite the settlement of long-pending tax refund claims amounting to Rs96.6 billion, warning that the delays are hurting the financial liquidity and investment confidence of foreign investors in Pakistan.

In a letter addressed to FBR Chairman Rashid Mahmood Langrial, OICCI expressed concern over the mounting backlog despite recent efforts by the tax authority. The chamber revealed that as of September 2025, pending claims include Rs62.2 billion in income tax refunds and Rs34.4 billion in sales tax refunds, according to data enclosed with the communication.

“We appreciate FBR’s cooperation and recent progress, but as of September 2025, outstanding refund claims of OICCI members still stand at Rs96.6 billion,” the letter stated.

Representing more than 200 multinational firms across multiple sectors, OICCI emphasized the need for a transparent, efficient, and time-bound refund system. The chamber noted that prolonged refund delays continue to impact foreign investors’ operations, resulting in liquidity challenges and discouraging future investment.

OICCI Chief Executive and Secretary General M Abdul Aleem stated that refund delays hinder business planning for multinational members who contribute significantly to Pakistan’s economy through investment, job creation, and technology transfer. He stressed that fulfilling fiscal commitments such as tax refunds in a structured and timely manner is vital to improving the investment climate.

The letter, also copied to Finance Minister Muhammad Aurangzeb, Board of Investment Secretary Captain (R) Muhammad Mehmood, and OICCI President Yousaf Hussain, called for urgent action to improve the ease of doing business and restore investor confidence.

74 OICCI Member Companies Await Pending Refunds from FBR

OICCI said 74 member companies, primarily based in Karachi, with some in Islamabad and Lahore, currently have refund claims pending with the FBR. These include firms in the power, chemical, and industrial sectors, such as K-Electric and major manufacturing mills.

While acknowledging that FBR’s automation drive has enhanced documentation, a business representative said it has not translated into faster refund processing. “Decisions still depend on top-level policy directives tied to fiscal management,” he noted, adding that delays are often used to balance budget shortfalls.

OICCI members continue to pay nearly Rs10 billion in taxes daily, yet securing refunds remains an uphill task. The official remarked that the delays damage Pakistan’s investment image abroad, especially at corporate headquarters in Europe and the US.

He cited bureaucratic inefficiencies within the FBR, noting that departments often operate in isolation while chasing daily revenue targets. Despite these challenges, OICCI members have continued supporting FBR’s revenue goals by paying advance taxes, expecting reciprocal action in clearing refunds.

The businessman also referenced Procter & Gamble’s (P&G) recent exit from Pakistan^[1] as a reminder of the need for a stable business environment. Although P&G’s decision was driven mainly by currency fluctuations, he said it highlighted the broader difficulties multinational companies face in sustaining operations in Pakistan.

“When P&G entered Pakistan, the dollar was Rs60, now it is around Rs280,” he said. “That makes it extremely difficult for global leadership to justify long-term investment in such an uncertain environment.”