FAPUASA writes open letter to PM, FM to restore tax rebate

Islamabad: Federation of All Pakistan Universities Academic Staff Associations (FAPUASA) has submitted an open letter to Prime Minister Shehbaz Sharif, and Federal Minister for Finance Muhammad Aurangzeb strongly urging the continuation of 25% tax rebate for university teachers and researchers beyond Fiscal 2025-26.

The letter expressed serious concern over Clause 3A of the Finance Bill 2025-26, which states: “shall cease to have effect after tax year 2025.” This clause triggered widespread anxiety within the academic community, especially since the 14th meeting of the National Assembly Standing Committee on Finance and Revenue, held on May 29 had already approved the restoration of the rebate.

The Secretary Revenue, during the same meeting, had assured the committee that the controversial clause would be removed. FAPUASA also acknowledged with appreciation.

The opportunity provided to its delegation to present its stance before the Senate Standing Committee on Finance and Revenue on June 19 in the presence of the Finance Minister. The committee endorsed FAPUASA’s position and formally recommended the continuation of the rebate, as reflected in its official report submitted to the Senate.

However, in a recent media statement, the Chairperson, Federal Board of Revenue (FBR), reportedly claimed that the International Monetary Fund (IMF) did not agree to the continuation of the tax rebate for teachers and researchers.

FAPUASA expressed deep disappointment over this statement and called for transparency and national ownership in policy decisions that directly affect Pakistan’s higher education and research sectors. The federation emphasised that policy vital to national intellectual development should not be compromised solely on external pressure. Is IMF undermining the sovereignty of State of Pakistan through such micromanagement, it asks?

The tax rebate, originally introduced in 2006 at a rate of 75%, was designed to help retain highly qualified academicians and curb the persistent problem of brain drain.

It aligns with global best practices where similar incentives are offered to researchers and educators to promote innovation and human capital development.

In Pakistan, this rebate significantly contributed to improving research output, faculty retention and academic excellence. Faculty members often bear publication and travel costs personally, while also representing Pakistan at international academic platforms. The rebate, though modest in fiscal terms, long stood as a symbol of state recognition of their vital role in nation-building.

FAPUASA requested the Prime Minister and the Finance Minister to honor the recommendations of the parliamentary standing committees and remove the clause limiting the rebate to the current tax year.

It reiterated that such support is critical for ensuring continuity and morale in the higher education and research sectors. This is not just about tax relief, it is a matter of national principle and commitment to education and innovation, the letter concludes.