The Federal Cabinet has reinstated a 25% income tax rebate for teachers across Pakistan, following intervention by the Federal Tax Ombudsman (FTO). This move comes after the FTO resolved over 5,000 complaints from teachers who had faced issues related to the tax rebate.
At a press conference, Khalid Javed, Registrar to the FTO, and Almas Ali Jovindah, Advisor for the Legal and Media Wing, explained that the income tax rebate had been in place for teachers since the introduction of the Income Tax Ordinance 2001. However, many teachers had filed complaints due to delays and issues with the implementation of the rebate, particularly regarding refunds.
The complaints primarily involved the Salary Disbursing Authorities and Withholding Authorities, which had over-deducted tax from teachers’ salaries without considering the 25% rebate. These issues led to the accumulation of numerous unresolved claims for tax refunds.
In November 2024, the Federal Board of Revenue (FBR) announced that the rebate had been omitted under the Finance Act of 2022, making it non-applicable for the tax years 2023 and 2024.Â
This prompted a surge of complaints, which the FTO Secretariat took up with the FBR, emphasizing the legal position and historical context of the teachers’ tax rebate.
Through continued correspondence with the FBR and persistent efforts, the FTO played a critical role in clarifying that the rebate should still apply. The matter was eventually taken seriously by the FBR, leading to the Cabinet’s decision to restore the 25% tax rebate for teachers.
