Around Rs70-80 billion is reportedly remitted outside Pakistan each year for fees related to Cambridge International Examinations (CIE), including O-Level and A-Level programs, as well as University of London degree programs offered in Pakistan, Business Recorder reported.
These funds, largely sent to the United Kingdom, remain untaxed under existing Pakistani tax laws.
The figure is based on fee payments by O-Level and A-Level students, as well as undergraduate and postgraduate degree programs offered through University of London, either via recognized local institutions or online distance learning platforms. After deducting locally retained fees, the amounts sent abroad are significant, yet remain unchecked by the Federal Board of Revenue (FBR).
The Federal Tax Ombudsman (FTO) has raised concerns about the untaxed remittances and called on the FBR to establish rules to capture this revenue. Two new subsections, 3A and 3B, were added to section 101 of the Income Tax Ordinance, 2001, introducing the concept of “significant economic presence” to identify taxable flows linked to foreign educational programs.
However, according to the FTO, more than 15 months after the introduction of these provisions, the FBR has yet to prescribe the necessary thresholds and issue explanatory circulars, failing to enforce compliance.
The Cambridge school system in Pakistan alone includes over 750 schools following the Cambridge Assessment International Education curriculum, with more than 100,000 students taking O-Level and A-Level exams each year.
In 2025, approximately 127,000 students appeared for A-Level exams, recognized for equivalence by the Inter-Board Chairmen Committee (IBCC). Despite recognition and increasing tax burdens on Pakistani citizens, the significant outward flow of educational fees remains untaxed, the FTO report noted.
