ISLAMABAD: The Association of Private Sector Universities of Pakistan (APSUP) and the Association of Private Medical Institutions of Pakistan (PAMI) have requested the government to restore tax rebate for full-time teachers/researchers and sales tax exemption on hospitals and non-profit organizations (NPOs).
In an appeal to President, Chairman Senate, Prime Minister, and Finance Minister, both the APSUP and PAMI have asked the government to issue immediate instructions to restore the tax rebate for full-time teachers and researchers, reverting to the pre-budget position through appropriate administrative and legislative means.
They informed that, “whereas education and healthcare are fundamental constitutional responsibility of the state, and the continued focus on education and healthcare, are vital for our nation’s progress, we therefore prefer to write to you this appeal regarding two pressing issues stemming from the Finance Bill 2024, which threaten to undermine these two critical sectors of our nation—education and healthcare”.
Out of 63 million school-age children in Pakistan, an estimated 26 million are out of school. For those who do attend, the majority receive subpar education, resulting in only 50% of grade 5 students being able to read a story in Urdu, 54% being able to read a sentence in English, and only 46% being able to do a two-digit division. These figures highlight the severe national education emergency we face.
Higher education is similarly affected, with only 10% of our 266 higher education institutions meeting reasonable quality standards, the presentation of APSUP and PAMI stated.
However, the omission of Clause (2) of Part III of Second Schedule to the Income Tax Ordinance, 2001, through the Finance Bill 2024, has removed the tax rebate for full-time teachers and researchers, exacerbating financial and compliance strains in the education sector.
This budgetary proposal is counterproductive and undermines the government’s recent commitment to education. At a time when there is a dire need to strengthen our faculty, this measure will likely weaken it, affecting both private and public education institutions’ ability to attract and retain quality teachers.
The APSUP and PAMI explained that the Finance Bill 2024 also includes amendments to the Sales Tax Law, notably the withdrawal of Clause 166 and the omission of the words “Imported by or” from Clause 165 of Table 1 of the Sixth Schedule to the Sales Tax Act, 1990. This change imposes an 18% sales tax on supplies to hospitals and NPOs, including medical and surgical equipment at the import stage, significantly increasing financial burdens on these essential institutions.
They said that hospitals and NPOs play a critical role in providing healthcare to underprivileged segments of society, often free of cost or at subsidized rates. The proposed changes will exacerbate financial strains, discourage essential healthcare modernization, and ultimately hinder the delivery of healthcare services to those most in need.
The government should take necessary steps to suspend the proposed changes in the Finance Bill 2024 and restore the sales tax exemptions for hospitals and NPOs, reverting to the pre-amendment status using appropriate administrative and legislative means, APSUP and PAMI added.
Copyright Business Recorder, 2024