livelawpk.com - FTO Ordered to Ensure Equal Tax Treatment for Schools Admins

Federal Tax Ombudsman Rules in Favor of Teachers’ Tax Rebate --- FTO Ordered to Ensure Equal Tax Treatment for School Administrators

7 months, 1 week
448

Federal Tax Ombudsman Rules in Favor of Teachers’ Tax Rebate --- FTO Ordered to Ensure Equal Tax Treatment for School Administrators

Islamabad 15-05-2024: The Federal Tax Ombudsman (FTO) issued significant directions to FBR while hearing multiple complaints [Complaint Nos. 1673 etc. of 2024] filed under Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000, regarding the denial of tax rebate to certain school administrators under the Income Tax Ordinance, 2001, has prompted a review of discriminatory tax practices. The complainant, currently serving as a Senior Headmaster in a government school in Gujranwala, highlighted the denial of a 25% tax rebate entitled to full-time teachers upon being appointed as Senior Headmaster. Similar grievances were echoed by numerous Principals, Headmasters, and other educational administrators in the region.

In response to the complaints, the Revenue Division submitted that tax rebates are exclusively reserved for full-time teachers or researchers, and not extended to administrative positions such as Principals or Headmasters. During the hearing, representatives from the Revenue Department reiterated their stance, while the complainant cited previous decisions where similar discriminatory practices were rectified.

Upon review, it was established that Principals of FG Schools and Elementary & Secondary Schools in KPK were already enjoying tax rebates, whereas those in Punjab were denied the same, despite similar job roles. The denial was deemed discriminatory, especially towards Subject Specialists who were effectively functioning as full-time teachers. Similar issues were previously addressed in complaints from KPK, resulting in recommendations upheld by the President of Pakistan, highlighting the need for equitable treatment across provinces.

Based on the findings, the Federal Board of Revenue (FBR) is directed to ensure parity in tax treatment between educational administrators in Punjab and their counterparts in FG Institutions and KPK schools. Compliance is expected within 45 days. The resolution of these complaints signifies a step towards rectifying discriminatory tax practices in the education sector, ensuring fair treatment for all eligible employees across provinces.