Illegal educational institutions: FTO orders probe into tax matters
Federal Tax Ombudsman Initiates Probe Into Tax Affairs of Unrecognized Educational Institutions
In Islamabad, the Federal Tax Ombudsman (FTO) Dr. Asif Jah, prompted by a reference from President Dr. Arif Alvi, has directed an investigation into the tax affairs of unauthorized educational institutions lacking recognition from the Higher Education Commission of Pakistan.
Notably, the FTO’s office issued notices to the Secretary of the Revenue Division, Member Operations Inland Revenue Policy, and the Chief Commissioners of the Large Taxpayer Office and Corporate Tax Office, demanding comments by December 29, 2023.
The FTO will scrutinize allegations of maladministration based on the reference from the President, initiated by tax lawyer Waheed Shahzad Butt under Section 31 of the Federal Tax Ombudsman Ordinance, 2000.
The FTO’s notice asserts, “whereas the above-mentioned reference has been referred by the President of Pakistan. And whereas the FTO has ordered to conduct an investigation in the subject reference. Now, therefore, you are required to submit para-wise comments in annotated form to the issues contained in the reference by December 29, 2023.”
Complainant Waheed Butt emphasized the necessity of lawful proceedings against fraudulent educational institutions exploiting the public in the guise of education but evading taxes. Despite the Higher Education Commission’s regulatory mechanism, the Federal Board of Revenue (FBR) has allegedly not adequately addressed the tax matters of these unapproved private institutions.
Over recent years, media and education-related platforms have consistently reported irregularities and violations of tax laws by private colleges and universities in Pakistan. Numerous institutions have been labeled as “Fake, Illegal, Unlawful, and Unrecognized” by the HEC, fostering fraud in the education sector.
The complaint urges the FBR to initiate appropriate tax proceedings, citing specific sections of the Income Tax Ordinance, 2001, and the Sales Tax Act, 1990, against entities not approved by the HEC, subsequently declared fake by the commission.
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