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The current VAT law, which came into effect in July 2019, does not have provisions for companies to pay VAT in advance during the release of goods from warehouses.

The NBR offered the scope to companies to adjust the previously deposited VAT with their monthly payable amount after the new law became effective.

Yet, the scope of monthly adjustments of VAT was not enough for businesses to make their current balance zero with the NBR’s field offices.

Officials said the NBR hiked the ratio of adjustments with monthly payable VAT thrice to 30 per cent to enable firms to adjust VAT that firms had paid in advance under the 1991 law.

“This will ease working capital pressure for businesses,” said Masud Sadiq, member for VAT policy of the NBR.