The Federal Board of Revenue (FBR) told the Senate Standing Committee on Finance and Revenue this week that it is currently operating under an IMF-mandated ceiling that caps its outstanding tax refund stock at Rs390 billion at any given time — a limit officials say is meant to keep refund processing disciplined, but which lawmakers say is instead leaving genuine claims stuck for years.
The committee, chaired by Senator Saleem Mandviwalla, met on September 10 to grill FBR officials over long-pending refunds. The most striking case raised was that of chemical company Oleocorp, which told the committee it has been waiting six years to recover Rs270 million in refunds on taxes it was never actually liable to pay. Senator Mandviwalla pointed out that refunds are supposed to be processed within 72 hours under the FBR’s newer system, and asked pointedly why a legitimate claim would instead sit unresolved for years.
Senator Abdul Qadir went further, arguing that such prolonged delays are themselves evidence the claims are valid, and demanded punitive action against the officials responsible for sitting on them. Senator Talha Mahmood used the session to press the broader point that the FBR needs to become more taxpayer-friendly rather than treating refund claims with suspicion by default.
Minister of State for Finance Bilal Azhar Kiyani told the committee that an IMF staff mission is expected in Islamabad around September 23-24, timing that puts extra pressure on the FBR to show it is managing the refund backlog credibly before international lenders arrive. FBR officials, for their part, said a new first-in-first-out (FIFO) system has already been rolled out specifically to cut down on the discretionary, case-by-case decision-making that has historically let some refunds languish while others got fast-tracked.
On the numbers, the FBR said it has issued Rs197 billion in refunds in the first two months of the current fiscal year (FY27), up from Rs157 billion in the same period last year — a year-on-year increase of roughly Rs40 billion. The tax authority paid out a total of Rs500 billion in refunds over the whole of last fiscal year.
| Metric | Figure |
|---|---|
| IMF-mandated refund retention ceiling | Rs390 billion |
| Refunds issued, first 2 months of FY27 | Rs197 billion |
| Refunds issued, same period last year | Rs157 billion |
| Year-on-year increase | ~Rs40 billion |
| Total refunds paid in FY26 (last fiscal year) | Rs500 billion |
| Oleocorp’s pending refund claim | Rs270 million (pending 6 years) |
| Next IMF staff mission to Islamabad | Around Sept 23-24, 2026 |
“Refunds were expected to be processed within 72 hours,” Senator Mandviwalla told the committee, questioning why some taxpayers had instead waited years for money they were legally owed.
The committee ultimately directed the FBR to resolve the Oleocorp case within 30 days, and officials assured members that compliance was forthcoming. The Rs390 billion cap itself is part of Pakistan’s broader IMF programme conditions, which set limits on how much refund liability the FBR can carry on its books at once — a structural fix meant to stop refunds from being quietly deferred to manage the government’s cash position.
Our Opinion
The FIFO system and the IMF-linked refund ceiling are sensible reforms on paper, but the Oleocorp case is a reminder that structural fixes only matter if they’re actually enforced against the backlog that predates them — a six-year wait for a legitimately non-payable tax looks less like a processing hiccup than refund money being used as an informal, interest-free loan from businesses to the state. With an IMF mission landing in a matter of weeks, the FBR now has a clear, dated incentive to show real movement, and whether the Oleocorp case is actually closed within the promised 30 days will be a fair test of whether this Senate session produced results or just another round of promises for the record.
