EDITORIAL: The dismal state of higher education in Pakistan is a multifaceted issue that spans a whole range of challenges, from outdated curricula and problems with the quality of faculty to illegally established private institutions.
The last of these issues is especially concerning, as recent years have seen unscrupulous elements set up a plethora of unregulated institutions not recognised by the Higher Education Commission (HEC) solely to monetarily exploit an unsuspecting public. They have taken advantage of inadequate oversight, and offer substandard education and fake degrees, which ultimately undermines the credibility of the education system.
But beyond the harm to students, a crucial overlooked aspect here relates to the significant implications for the national exchequer.
Given that these institutions operate outside official sanction, there are serious questions to be answered regarding their status as taxpaying entities, their financial transparency and the extent of revenue losses incurred due to their unregulated operations.
As a report in this newspaper highlights, troubled by the potentially massive tax evasion being committed right under the Federal Board of Revenue’s (FBR’s) nose, a concerned citizen had moved a reference before the President, requesting a probe be conducted by the Federal Tax Ombudsman (FTO) into the tax affairs of universities not accredited with the HEC.
The President had referred the case to the FTO, directing a comprehensive inquiry into potential tax fraud by non-compliant institutions and the FBR’s possible negligence, so that accountability for any inaction and maladministration could be ensured.
However, despite over a year having passed since the reference was originally moved and the FTO initiated its investigation, no report has been submitted before the President thus far, raising grave concerns about bureaucratic delays, lack of transparency in official quarters and the commitment of authorities to holding tax evaders accountable.
It is worth noting that as far back as December 2023, the FTO had issued notices to the secretary Revenue Division, Member Operations Inland Revenue Policy, and Chief Commissioners of the Large Taxpayer Office and Corporate Tax Office, requesting their comments on the matter.
The continued lack of progress strongly suggests that these officials have not given the issue the attention it warrants and have failed to take any meaningful action to address the concerns raised. Neglecting such responsibilities would be alarming under even normal circumstances, but amid the severe economic challenges the country faces, this becomes entirely unacceptable.
As has been noted in this space before, the FBR has no compunctions when it comes to strong-arming and essentially harassing law-abiding, taxpaying citizens in a bid to squeeze every last paisa of tax revenue from them.
But when it comes to holding entities accountable for potentially large-scale tax evasion, it appears to turn a blind eye, raising serious questions about its priorities, competence and integrity.
The HEC periodically issues lists of unregistered institutions. It shouldn’t be an insurmountable task to investigate their tax affairs, given that their names are publicly available. The FTO must follow up on this matter with urgency and ensure that the FBR does not stall or evade action on the issue any longer.
The relevant authorities must answer these questions: are these unaccredited institutions registered with the FBR and complying with tax regulations; how much revenue is being lost due to their unregulated operations; and what actions are being taken to ensure their financial accountability?
Furthermore, federal and provincial higher education authorities must establish a robust mechanism that ensures unregistered institutions comply with regulations and register within a deadline or face immediate closure.
The failure to do so has compromised educational standards, defrauded the public and led to significant tax losses. Such negligence must not persist.
Copyright Business Recorder, 2025
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