The government has requested the International Monetary Fund (IMF) to allow the reinstatement of a 25% income tax rebate for teachers and researchers, which was unexpectedly withdrawn after tax authorities enforced its removal from the law.
The FBR’s handling of the tax rebate for educators has drawn criticism, particularly after it began issuing notices to educational institutions in December, demanding not only full tax payments but also arrears dating back to July 2022. Authorities claimed the rebate had been removed in the Finance Act 2022, but tax officials only became aware of it in 2024.
On January 14, the FBR issued a notice to the National University of Science and Technology (NUST), instructing it to stop applying the rebate. The notice warned that failure to recover and deposit the full tax liability from teachers and researchers would result in recovery proceedings under Section 161 of the Income Tax Ordinance, along with penalties.
According to media reports, Finance Minister Muhammad Aurangzeb has directed the FBR to discuss the issue with the IMF, which has responded positively to the request.
Officials suggested the finance minister may announce the rebate’s restoration when the Tax Laws Amendment Bill is presented for approval in the National Assembly this month.
The Federation of All Pakistan Universities Academic Staff Association (FAPUASA) has strongly opposed the FBR’s move, condemning the removal of the tax rebate for teachers and researchers.
