The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to give the same tax rebate to Principals, Vice-Principals, and Head Masters of Elementary and Secondary Education in Khyber Pakhtunkhwa which is being given to teachers and researchers under Section 149 of Income Tax Ordinance 2002.
These instructions were passed by the FTO while disposing of complaints filed by the 29 Principals, vice Principals, and Headmasters of schools and colleges from different parts of the KP.
The complainant submitted that Headmasters and Principals in the teaching category are denied income tax rebates in salary on the ground that they are engaged in managerial duty and not teaching. According to the complainant, the Principal of a College or Higher Secondary School, being posts of the teaching cadre, should be treated in the teacher cadre and entitled to a salary rebate.
The FTO said that the government of KP laid down methods of recruitment of various posts of management cadre. The nomenclature of the posts is Director (BPS-20), District Education Officer (DEC), Additional Director (BPS-19), Drawing and Disbursing Officer (BPS-18), etc.
The provincial government issued a final revised Appendix dated 8th April 2004, indicating service rules of teaching cadres which includes a method of selection of Principals of High School, Subject Specialist, etc.
Notifications of the provincial government are produced by complainants showing Principals categorized in teaching cadres, while Director, DEO, AD, etc. are placed in management cadres, said FTO in its findings.
The categorization in management and teaching cadres is issued under KP Province’s Civil Servant (Appointments Promotion and Transfer) Rules 1989. As against categorization by KP’s Education Department, FBR’s placing them in the teaching category is strongly agitated by complainants being misconceived and discriminatory to treat same category’s taxpayers differently.
According to the FBR, “A full-time teacher means a person employed purely for teaching and not performing any administrative or managerial jobs, for example, Principals, Headmasters, Directors, vice-Chancellors, Chairmen, Controllers, etc. Similarly, a full-time researcher means a person purely employed for a research job only in a research institution and such institution is purely performing research activities.”
The FTO further said that it is a matter of fact that on tax matters FBR’s laws being special laws override all other laws/instructions. The complainant has compelling evidence of discriminatory treatment vis-à-vis less deduction of income tax from Principals of the Federal Government (F.G.) College. The apparently discriminatory treatment of FBR and RTO Peshawar is tantamount to maladministration.
The Ombudsman issued instructions to the FBR to direct the Chief Commissioner RTO Peshawar to ensure that Principals, vice-Principals, and Head Masters of Elementary and Secondary Education Institutions in Khyber Pakhtunkhwa are treated at par with Principals of F.G. Institutions in matters relating to tax withholding u/s 149 of Income Tax Ordinance 2001 and submit a compliance report within 45 days.
