Islamabad, March 28: The Federal Cabinet has reinstated the 25% income tax rebate for teachers following intervention by the Federal Tax Ombudsman (FTO), bringing relief to educators across Pakistan.
During a press conference at the FTO Headquarters, Khalid Javed, Registrar to the FTO, and Amas Ali Jovindah, Advisor Legal & Media Wing, announced that the FTO had resolved over 5,000 complaints related to the rebate issue. The decision will have a nationwide impact, benefiting thousands of teachers.
Background of the Tax Rebate Issue
The 25% income tax rebate for teachers had been in place since the enactment of the Income Tax Ordinance, 2001.
However, many teachers faced excessive tax deductions at the source, as salary disbursing authorities and withholding agents failed to apply the rebate correctly.
This led to significant delays and non-processing of refund claims based on the tax rebate.
The FTO recommended in thousands of cases that the Federal Board of Revenue (FBR) allow refunds.
However, in November 2024, the FBR publicly stated that the rebate had been removed under the Finance Act, 2022, making it inapplicable for tax years 2023 and 2024.
FTO’s Intervention and Resolution
After examining the legal framework, the FTO Secretariat determined that the rebate was still applicable. It continued to decide teachers’ complaints accordingly and repeatedly engaged with the FBR management to seek resolution.
Due to mounting complaints and persistent efforts by the FTO, the FBR reconsidered the matter, leading to the Federal Cabinet’s decision to restore the rebate.
Impact of the Decision
With the
The Federal Cabinet has reinstated the 25% income tax rebate for teachers following intervention by the Federal Tax Ombudsman (FTO), bringing relief to educators across Pakistan.
During a press conference at the FTO Headquarters, Khalid Javed, Registrar to the FTO, and Amas Ali Jovindah, Advisor Legal & Media Wing, announced that the FTO had resolved over 5,000 complaints related to the rebate issue.
The decision will have a nationwide impact, benefiting thousands of teachers.
Background of the Tax Rebate Issue
The 25% income tax rebate for teachers had been in place since the enactment of the Income Tax Ordinance, 2001.
However, many teachers faced excessive tax deductions at the source, as salary disbursing authorities and withholding agents failed to apply the rebate correctly.
This led to significant delays and non-processing of refund claims based on the tax rebate.
The FTO recommended in thousands of cases that the Federal Board of Revenue (FBR) allow refunds.
However, in November 2024, the FBR publicly stated that the rebate had been removed under the Finance Act, 2022, making it inapplicable for tax years 2023 and 2024.
FTO’s Intervention and Resolution
After examining the legal framework, the FTO Secretariat determined that the rebate was still applicable.
It continued to decide teachers’ complaints accordingly and repeatedly engaged with the FBR management to seek resolution.
Due to mounting complaints and persistent efforts by the FTO, the FBR reconsidered the matter, leading to the Federal Cabinet’s decision to restore the rebate.
Impact of the Decision
With the official reinstatement of the 25% tax rebate, teachers across the country can now benefit from reduced tax deductions on their salaries.
The FTO played a crucial role in ensuring clarity and fairness in the application of this tax benefit.
This decision marks a significant victory for the teaching community, ensuring they receive long-overdue financial relief.
