The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to deduct less tax from 20 female low-paid employees working as teachers on a temporary/ad-hoc basis at the Women’s University, Multan.
In this regard, the FTO has issued an order on Monday. The order caters to extend relief in a tax deduction in terms of Section 153(1 )(b) of the Income Tax Ordinance, 2001 (the Ordinance) of low-paid employees allowed on the strength of decisions which have been upheld by the President vide orders dated 15.08.2022 on the identical issue.
The alleged Departmental practice to subject the remuneration of low-paid/ad-hoc temporary employees has been examined in these orders in the light of relevant legal provisions i.e. Sections 12 and 149 of the Ordinance.
The above Legal provisions govern “Salary Taxation” Section 12 and withholding of tax thereupon under Section 149 of the Ordinance only the equation of employer-employee based on “Master-Se,vant Relationship” is material.
This criterion forms the basic parameter for any employment: RegularlAdhoc/Temporaryl Hired I Daily Wages which are different shades & forms of employment and the law doesn’t create any distinction among all the above forms.
According to the FTO recommendations to the FBR, the CCIR, RTO, Multan is directed to ensure that tax shall be deducted on these low-paid employees working on temporary I ad-hoc u/s 149, as has been ordained by the President of the Islamic Republic of Pakistan vide orders dated 15.08.2022 in similar cases of teaching community.
The Treasure, Women University, Multan to ensure that from now onwards tax withholding on the payments made to these temporary visiting faculty teachers are subject to section 149 of the Ordinance in the future; and report.
The FTO order stated that in the Petitioners’ cases, when compared with the regular faculty members of the institute in question, the deductions being made from regular faculty ~ vis-ã vis the petitioners there is a visible incidence of discrimination despite the fact that the nature of job remains the same in both categories.
Persons falling in the former category are getting more but paying less taxes under Section 149 of the Ordinance, whereas the latter category is subject to higher tax deductions in terms of Section 153(lWb) of the Ordinance.