While disposing of a complaint, the Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to ensure that the low-paid employees of Pakistan Television Centre, Peshawar are not burdened with excessive tax deductions at the withholding stage.
The complainant was working as a reporter-cum-cameraman at PTV, Peshawar against a monthly salary of Rs. 20,250. Initially, treating the complainant as a service provider, 20 percent income tax was deducted from his salary being non-filer. After becoming a filer, income tax was deducted at the rate of 10 percent.
These were identical complaints were filed against the excessive and unjust practice of deducting income tax @ 10-20 percent under Section 153(1) (b) of Income Tax Ordinance (the Ordinance)2001, from the salaries/wages of low-paid temporary/contractual employees of PTV Centre, Peshawar Cantt, treating them as services providers.
The complainants demand tax treatment under the head salary, warranting tax deduction u/s 149 of ITO, 2001. In dozens of cases of low-paid employees of Pakistan Broadcasting Corporation (PBC), (complaint No.2538/ISB/IT/2021), the FBR has implemented a recommendation of FTO. Similarly, in cases of hired lecturers and other employees of KPK’s Education Department, this office has held that all these employees are governed u/s 149 of ITO 2001.
The President of Pakistan had also upheld FTOs recommendations in respect of the above-mentioned low-paid employees of KPK’s education institutions. The office of FTO had earlier issued detailed Findings/Recommendations in respect of low-paid temporary/contractual employees of PTV Headquarters, Islamabad vide C. Nos. 0386 to 0402 and 0404 to 0424/informal/2022 dated 01.09.2022 wherein it was established that the complainants, who were hired by PTV as supervisors, translators, etc. over the last few decades as low-paid employees are entitled to similar relief which had been allowed to the employees of PBC and other similar cases.
Excessive and harsh deduction of tax from their meager salaries u/s 153(1)(b) of the Ordinance is against the dictates of the law and the nature of the treatment being discriminatory, tantamount to maladministration in terms of section 2(3)(i)(b) of the FTO Ordinance, 2000.
Accordingly, FTO has directed FBR to ensure that in line with parallel cases of PTV HQs and PBC, the low-paid employees of Pakistan Television Centre, Peshawar/complainants are not burdened with excessive tax deductions at withholding stage and to implement these Findings/Recommendations & findings in coordination with PTV Peshawar’s management on lines already done by the management of PTV HQs and PBC HQs Islamabad.
