Illegal educational institutions: FTO orders probe into tax matters

ISLAMABAD: Federal Tax Ombudsman (FTO) Dr Asif Jah, on the basis of a reference forwarded by President Dr Arif Alvi, has ordered to conduct an investigation against tax affairs of illegal educational institutions which were not recognised by the Higher Education Commission of Pakistan.

It is reliably learnt that the office of the FTO had issued notice to secretary Revenue Division, Member Operations Inland Revenue Policy, and Chief Commissioners Large Taxpayer Office and Corporate Tax Office for filing comments on December 29, 2023.

The FTO will probe the allegations of mal-administration on the basis of reference forwarded by the President, which was moved by tax lawyer Waheed Shahzad Butt, before the President of Pakistan in terms of Section 31 of the Federal Tax Ombudsman Ordinance, 2000.

The FTO’s notice states, “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.

The Complainant Waheed Butt told this correspondence that it is the need of the hour to initiate proper lawful proceedings against the fake/fraud educational institutions looting/robbing funds from general public in the name of noble profession of “education” but paying nothing to the public exchequer and openly involved in massive tax evasion.

Though the HEC maintains a structured regulatory mechanism yet tax matters of these private institutions/colleges have not been appropriately attended by the FBR.

During the past few years there has been regular reporting in media as well in various education-related websites about the irregularities and violation of tax laws committed by private colleges/universities in Pakistan. Dozens of institutions have been included in the list of “Fake, Illegal, Unlawful and Unrecognized Institutions” by the HEC, ultimately promoting fraud, cheating and deception to hoodwink the process of justice in the noble profession/field of education.

The FBR must initiate appropriate tax proceedings including action under Sections 161, 205, 182, 114, 176, 177, 214C of the Income Tax Ordinance, 2001 and action under Section 11, 25, 72B of the Sales Tax Act, 1990, against entities/institutions not approved by HEC which was ultimately declared as fake/fraud institution by HEC, the complaint added.

Copyright Business Recorder, 2023