FTO Orders FBR to Withdraw Notices Against 25% Tax Rebate for Teachers

Despite the federal cabinet’s decision to restore the 25 percent tax rebate for full-time teachers and researchers through the Income Tax (Second Amendment) Bill, 2025, the Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to immediately withdraw earlier notices that denied the rebate. According to a confidential cabinet document dated March 26, 2025, the proposal to restore the tax rebate, initially considered in a summary dated March 16, was approved following a submission by the Revenue Division. The cabinet’s approval legally reinstated the rebate for teachers and researchers. However, a letter issued by the FTO Secretariat on April 21, 2025, indicates that earlier instructions from FBR’s field offices had rescinded this benefit, leading to widespread complaints. These field directives contradicted a March 10 agreement between the federal government and the All Government Grand Alliance of Employees to retain the rebate. In light of the federal cabinet’s final decision and in continuation of the FTO’s earlier communication dated April 11, the FTO has now ordered the FBR to withdraw all such letters issued to withholding agents and salary disbursing authorities. The move will facilitate the resolution of grievances that affected employees raised and ensure compliance with the cabinet-approved amendment.