SBP’s intervention sought to bankroll tax refund bonds

Traders have urged that the SBP needs to ensure acceptance of sales tax refund bonds as collaterals by the banks and financial institutions as this would help them meet financial needs amid liquidity crunch. KCCI President Agha Shahab Ahmed has said that the FBR has issued bonds to the tax refund claimants which are to be traded freely in the country’s secondary markets and accepted by the banks as collateral under section 67-A of the Sales Tax Act 1990. However, despite specific directions in the relevant act, these bonds are neither being traded freely in the market nor being accepted by the banks, creating severe liquidity problems for the exporters who are unable to finish their export orders. In a letter to SBP Governor Reza Baqir, he said that almost a month has passed but so far but no relief has been provided to minimize the grievances being faced by exporters. Ahmed said the exporters are already going through the toughest time due to ‘creative destruction’, which has made many Pakistani products obsolete in the international markets whereas they are terribly suffering due to high cost of doing business, stagnant industrial activities, the highest ever inflation and many other issues particularly the stuck refunds. The issue needs to be resolved and the claimants must get their legitimate refunds on top priority.