The President of Pakistan, Dr. Arif Alvi, has declared the Ministry of Education responsible for criminal waste, inefficiency, and irresponsibility regarding the non-utilization of the Government of Germany’s donation of Rs. 13.707 million since 1993-1994.
He stated that the donation, given 30 years ago for the purchase of paper to enable the printing of cheap textbooks, is still unutilized while the government is asking for grants and loans internationally to meet its immediate needs.
Dr. Alvi has directed the hitherto defunct Ministry of Education and now the Ministry of Federal Education and Professional Training to conduct an inquiry, hold certain people responsible, and take action against them as per the law. He has also cautioned the Ministry of Education to refrain from shifting the burden of such inquiries onto the retired and expired people and directed it to submit the compliance report to the Federal Tax Ombudsman (FTO) within 45 days.
The President, in his decision that was announced yesterday in the appeal preferred by the Central Directorate of National Saving (CDNS) against the decision of the FTO, stated that the said money has remained in a non-profit bearing account for six years and nobody had cared about it.
Had it been an officer’s money, he would have not allowed even a day to lapse and would have deposited it in a profit scheme, Dr. Alvi remarked.
He pointed out that the loss incurred by keeping the money stagnating has accumulated to Rs. 17.490 million, which has exceeded the principal sum of Rs 13.707 million. This loss could have been greater had it not been pointed out by the audit, he added.
The President mentioned that the forgotten money had been deposited in a Special Savings Certificate (SSC) from 23 July 1999 to 23 July 2014. During this time, the government policy for SSC was for automatic roll over every three years that did not require investors’ prompting. He said that when the automatic rollover of the investment stopped after 23 July 2014, no one in the Ministry of Education bothered about the money and the ministry let the entire amount remain idle without earning any profit.
When the government had ordered for all funds of ministries lying in different banks to be deposited in the National Treasury in 2020, the audit revealed the gross negligence regarding the German grant lying in the non-profit account. However, when the Ministry withdrew the money in response to the audit objection, the matter of the deduction of Zakat and Withholding Tax surfaced.
Dr. Alvi termed the ministry’s negligence in the non-utilization of the principal amount and the profit thereof, which had increased to Rs. 54,265,500 as ‘shameful’ for being placed in an investment scheme without utilizing it as intended. Furthermore, he condemned the Ministry of Education on mainly two accounts: firstly, for being unconcerned and forgetting about a foreign grant given 30 years ago; and secondly, for criminal negligence that has deprived the people of Pakistan of Rs. 36,357,051 as profit that could have been earned if the money had been invested properly.
The President also noted that the ministry had failed to obtain the Income Tax and Zakat Deduction Exemption certificates to claim exemption from deduction of Withholding Tax and Zakat, which as per policy in vogue, was admissible to it. Resultantly, the Central Directorate of National Savings (CDNS) had deducted both Withholding Tax and Zakat for the non-furnishing of an Exemption Certificate, which again reflected the ministry’s inability to handle government investment prudently and efficiently.
The President exonerated the CDNS for ‘acting in good faith’ and deducting both the Withholding Tax and Zakat for Exemption Certificates.
He has directed the Ministry of Federal Education and Professional Training to contact the Federal Board of Revenue (FBR) and the Zakat Department to obtain Exemption Certificates with retrospective effect. He has also directed the FBR and the Zakat Department to consider the issuance of Exemption Certificates on a ‘One Time Basis’ in accordance with the respective rules and regulations.