FTO hails restoration of teachers tax rebate

ISLAMABAD: Hailing the restoration of teachers’ tax rebate at 25%, the Federal Tax Ombudsman (FTO) has said it played a crucial role in resolving the issue and clarifying its admissibility, as in past years.

In order to comply with the direction of FTO, the FBR took up the matter of teacher rebate issue, thus the federal cabinet restored the teachers tax rebate @25%.

According to an FTO statement issued on Thursday, historically teachers’ tax rebate @25% remained admissible over decades i.e. ever since the promulgation of Income Tax Ordinance 2001.

Due to the presence of the above referred provision on the statute, this forum received a huge number of complaints which runs into multiple of thousands.

The main grievances of these complaints were extraordinary delays and not allowing the resultant claim of refunds based on the tax rebate.

Most of the times, the salary disbursing authorities/withholding authorities over-deducted tax at source from the salary payments without having regard to the tax rebate @25%.

Accordingly, recommendations in thousands of cases were made with the directions to the dept/FBR field offices to allow refunds based on teachers tax rebate @25%.

However of late, in November 2024, the FBR made public that teachers rebate @25% had been omitted vide Finance Act, 2022 and as such it was not admissible in the tax year 2023 & 2024, and thereafter.

In this background, the FTO Secretariat took cognisance of the issue and it surfaced in the light of accompanying facts of the issue that the teachers’ rebate was still applicable, available to the teachers’ community.

Resultantly, the FTO Secretariat kept deciding the complaints filed by teachers’ community by considering the teachers rebate as admissible. The FTO Secretariat also took up the matter with the FBR management through letters by highlighting all the chronological developments and legal position of the issue.

Meanwhile, the number of complaints on the issue kept piling up. The FTO Secretariat continuously interacted with the FBR through letters as well as through its orders.

“However, now it is a matter of much satisfaction that the FBR took this matter seriously and the federal cabinet has restored the teachers rebate @25%. This forum has played a very crucial and important role in the resolution of this issue and also in bringing clarity to the current admissibility of the same, as in the past years.

“On estimate basis we have dealt with approximately five thousand complaints on this issue. However, due to above development, the countywide teachers community which may be in lacs, will benefit, which is point of much solace to this organisation which is the premier facilitating and grievances redressal forum for the taxpayers.”