Governments create frameworks in which people do their businesses. Any amendment in rules and regulations of this framework compel businesses to change the ways to operate their business. The two major areas wherein any change affects the business directly i.e.economic and legal policies. Most important component of economic policy is the taxation system. Not only the tax rates effect the business directly but the way the tax is charged, collected and if paid extra, refunded also impacts the business. Almost on daily basis, the Government functionaries who excel in the form of rhetoric, claim to have either improved Ease of Doing Business and reduced Cost of Doing Business or are in the process of doing so. But each claim proves a mirage. The issue of high Cost of Doing Business coupled with very low Ease of Doing Business is a gnawing issue for the entire business community. It does not hurt only the business which is direct affecteeof these two factors but it creates a chain of affectees each with some sort of negative impact on their business. The Government charges and collects sales tax under the Sales Tax Act 1990 and rules made thereunder with clear provisions that where the sales tax, if paid more than the liability, is to be refunded within 60 days. As per law, the FBR has to issue a Refund Payment Order (RPO) within 60 days of filing of refund application. Originally, the refund was processed by a Senior Auditor and RPO was issued by Assistant/Deputy Collector of Sales Tax Collectorate and the cheque was issued the next day by the Collectorate. However, during the 10 years the GOP has attached so much importance to this routine matter of refund that sometimes the Prime Minister of the country distributes the cheques in a ceremony attended by business glitterati, creating an illusion of a king distributing his largess on his subjects. The Refund through Bonds scheme shall not only increase Cost of Doing Business but will also reduce Ease of Doing Business The GOP after failing to liquidate their liabilities of Rs. 200 Bill to the business community accumulated during the last 10 years had announced to issue 3 Year Maturity bonds to settle this liability. It promised to issue the Refund Bonds in April,2019 and asked the FBR to issue the RPO of deferred amounts of sales taxrefund by 28 Feb. However, FBR neither issued the details of all the Deferred amounts not gave any reason for not doing so although the detail is available with the FBR on the click of a computer key. And the fate of Bonds is nowhere to be seen and seems to have gone awry. The Refund through Bonds scheme shall not only increase Cost of Doing Business but will also reduce Ease of Doing Business. Under the current system, the assesse applies for refund alongwith all original documents, FBR would checks it, issue RPO and the amount is sent directly to the assessor’s bank account; just 3 steps. However, the Refund through Bond system has increased the steps from 3 to 9.These 9 steps consist of; 3 steps as stated above; after issue of RPO, the assesse shall apply to FBR Islamabad requesting to issue Bond; the Bond shall be sent to the Central Depository Company, Karachi; the Bond holder shall get an entitlement certificate ( or some similar documents) to go to the Bank for financing; the Bank shall verify from the CDC the amount and other particulars; after verification, the Bank shall decide to finance the Bond at the then prevailing interest rate, which now is Kibor+ 2-3%i.e. around total 16% per annum; after 3 years, the Bondholder may apply to FBR Islamabad to redeem the Bond; the Bond can only be redeemed after 3 years; no time limit or procedure has been described for redeeming the Bond. As detailed, the job which was done in 3 steps, shall now take about 9 steps. It doesn’t stop here. The cost has also gone up. The Government shall pay a simple 30% cumulative interest for 3 years. The assesse shall have to pay a minimum of 48% cumulative interest, meaning thereby that he shall be getting 18% less refund or in other words, shall be giving a “discount” of 18% to the Government to get his rightful refund. The businessmen would perhaps accept this with a pinch of salt, had this 18% gone to the Government’s kitty. Let us see who is going to benefit and who is going to lose from this Bond scheme. Obviously the Banks whose earnings, if the entire Rs.200 bill refunds are paid through Bonds, shall increase by Rs. 96 Bill from lending against 100% secured loan. The Government shall be losing Rs60 billion and the hapless businessmen shall be losing Rs.36 billion. The writer is a Chartered Accountant