Islamabad, Feb 1: The Federal Board of Revenue (FBR) has reignited controversy by issuing tax notices to teachers and researchers across Pakistan, demanding full income tax payments, including backdated taxes from July 2022. This move comes after a prolonged period of inaction and has raised concerns within academic circles about the removal of a long-standing tax exemption.
Previously, teachers and researchers enjoyed a 25% tax exemption, which was revoked under the Finance Act of 2022. However, this change went unnoticed by many, including FBR officials, until 2024. In response to the new tax notices, the FBR is now demanding compliance with full tax payments, including arrears from the past two years.
One prominent case involves the National University of Sciences and Technology (NUST), which received a warning notice on January 14. The FBR instructed NUST to collect the full tax payments from its faculty members, threatening legal action under Section 161 of the Income Tax Ordinance if the university failed to comply.
READ MORE: FBR Misses January Revenue Target by Rs80 Billion
In the face of mounting criticism, the government has approached the International Monetary Fund (IMF) to seek approval for the restoration of the 25% tax exemption for educators and researchers. According to sources cited by Express Tribune, Finance Minister Muhammad Aurangzeb has directed FBR to discuss the issue with the IMF, and the organization has reportedly agreed to the exemption’s restoration. An official announcement is expected once the Tax Laws Amendment Bill is presented in the National Assembly.
The Federation of All Pakistan Universities Academic Staff Association (FAPUASA) has voiced strong opposition to FBR’s decision, criticizing the removal of the tax exemption as unfair and detrimental to academic professionals. The association has called on the government to expedite the restoration of the exemption to alleviate the financial burden on teachers and researchers.
The issue remains a hot topic in academic and policy-making circles, as both the academic community and government work toward resolving the tax exemption dispute.
