FTO Directs FBR to Stop Discriminatory Tax Withholding on Teachers’ Exam Duties

The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to ensure all salary payments made to the teachers and school staff performing supervisory & invigilation duties and paper marking are not subjected to discriminatory tax withholding under section 153 (services rendered) of the Income Tax Ordinance 2001. According to an order issued by the FTO on Monday, the complainants are government school teachers who, in addition to their regular teaching assignments, are doing Supervision & invigilation work, holding examinations, and marking papers for the Board of Intermediate & Secondary Education (BISE)  Gujranwala. Currently, the payments received by them from the Board are being subjected to withholding u/s 153(1)(b) (Services rendered), instead of head Salary, under Section 149 of the Income Tax Ordinance, 2001 (the Ordinance). FTO order declared that the remuneration, fees/wages paid by the Boards of Intermediate & Secondary Education to the supervisory & invigilation staff and Paper Markers, under an arrangement with their employers, fully falls under the head salary, therefore it warrants tax withholding u/s 149 instead of section 153(i)(b) of Income Tax Ordinance, 2001. Discriminatory withholding under section 153(1)(b) in such cases is an act of maladministration in terms of section 2(3) (i)(a)(b)(c) and (ii) of the FTO Ordinance, 2000. The FBR is directed to ensure that the  RTO Gujranwala, in coordination with Board of  Intermediate & Secondary Education, Gujranwala reviews its current withholding regime in the cases of  Complainants, so that all payments made to the teachers and schools staff performing supervisory &  invigilation duties and paper marking are subjected to tax withholding u/s 149. FTO order stated that supervision & invigilation, holding of examinations, and marking of papers, all these processes constitute an integral part of any education system. It is an admitted fact that the said services mainly aim at conducting the processes of evaluation & grading of students. Similarly, this evaluation is solely based upon the curriculum & course material taught by the same teachers; therefore, it is part & parcel of the education system and an extension of the teaching assignment. These services are provided by the teachers during their duty hours and with the full consent and under the directions of their employer, i.e., the Provincial education department. All schools & colleges are obligated to share the lists of their respective teachers & staff available for the aforesaid assignments, and any refusal is construed as non-compliance with office duties.  Teachers performing the above services cannot negotiate the rates of remuneration and are paid the amounts as fixed by the BOGs of Education Boards. It is pertinent to mention here that  Secretary Schools & Colleges are ex-officio members of said  BOGs. The amounts paid in the above connection are quite nominal because all teachers and staff members are rotated during the year Moreover, in the cases of primary school teachers and lower invigilation staff, normally, salaries fall below the tax limit however, they are heavily subjected to section 153(i)(b) for their invigilation duties, FTO order added.