FBR seeks data of private education institutions to broaden tax base

KARACHI: The Federal Board of Revenue (FBR) has sought information about private education institutions from Sindh government and associations in a bid to broaden the tax base, sources said on Tuesday.

The sources said the FBR asked the provincial education departments and private education associations to provide the data.

Badaruddin Qureshi, chief commissioner Inland Revenue of Regional Tax Office (RTO-II) Karachi confirmed with The News that the tax office sought information of pre-primary, primary, secondary and higher secondary institutions registered with the provincial government and private schools association.

The details that were sought include names of private schools/colleges, owner names, computerised national identity card numbers and addresses. Notices were sent to Directorate of Inspection and Registration of Private Institutions Sindh, All Sindh Private Schools Management Association, Board of Intermediate Education Karachi, Sindh Board of Technical Education and Board of Secondary Education, Karachi. They were asked to furnish the detailed by June 10.

Qureshi said the tax department found a number of schools through physical surveys, but most of them are not registered with the tax authorities. Many of them charge huge fees, but their tax contribution is none.

The chief commissioner said the purpose of brining schools into the tax net is also to identify potential taxpayers who are paying such colossal fees.

Qureshi said schools are withholding tax agents and supposed to collect advance tax from individuals paying fees above Rs200,000 a year. “As a withholding agent every school deducting advance tax is responsible to provide information of fees payers.”

The tax official added that public sector institutions are too legally bound to share such data with the FBR. The details would prove fruitful to broaden the tax base. In March, the broadening of tax base wing of RTO-II Karachi conducted surveys of schools / educational institutions in order to verify their registration with the income tax department.

The special teams of the tax office visited various localities of the city to verify the tax status of the schools, pre-schools/Montessori, colleges and educational / tuition centers. The survey also collected details of fee structures of schools to match the data with the details to be obtained from provincial education department.

The chief commissioner urged the parents to point out the schools which are not complying with the tax laws. The chief commissioner also advised the parents to get adjustments or claim refunds against the tax withheld on payment of education fees.