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ISLAMABAD: The President of Pakistan has upheld the order of Federal Tax Ombudsman (FTO) and directed the Ministry of Education and the Central Directorate of National Saving (CDNS) to improve their working and training of the officers dealing with property and public rights.

As per details, the representation filed by the CDNS before the president against the order of FTO. The order under reference stated that deduction of income tax and Zakat by National Savings Centre, Civic Centre, Islamabad shows gross incompetence and inefficiency of the concerned staff, therefore, National Savings Centre is bound to repay/refund the amount of Rs10,820,724 deducted as advance tax and Rs986,225 deducted as Zakat to the Ministry of Education immediately.

The Public Accounts Committee (PAC) of the National Assembly of Pakistan directed the Principal Accounting Officer of the Ministry of Education and Professional Training to file a reference before FTO and the Ministry of Finance.

Briefly, the Ministry of Education received funds of Rs13.707 million as donation from the German Government in 1993-94 which were invested in the National Savings Scheme (NSS) of the CDNS at National Saving Centre Islamabad.

In pursuance of the 18th Constitutional Amendment, the Ministry of Education was devolved and the Ministry of Education and Professional Training was established.

Thus, the funds were also transferred to the (M/O FE&PT) being the successor of the defunct M/o Education, whereas, the CDNS conveyed the total amount of the certificates were Rs73.668 million.

However, in the light of PAC directions, the Departmental Accounts Committee in its meeting held in February 2020 decided to retrieve the funds and deposit it in the government Treasury which was also endorsed by the PAC Committee.

The ministry approached the CDNS for the purpose and the CDNS issued a cheque amounting Rs54,265,571 after deducting Rs10,820,734 against the WHT as well as Rs986,225 as Zakat, total amount of Rs54,265,571 was deposited in the government treasury.

However, when the report was placed before the PAC, the committee issued the referred directions to the PAO of the M/o E&PT.

Therefore, the ministry took up the matter with the Tax Ombudsman who observed that the case under hand reflected inefficiency and incompetence of the concerned officers/officials of National Saving Centre, unauthorized deductions of Income Tax and Zakat was made while encashing Special Saving Certificates and they showed complete ignorance that Federal Government is exempt from Income tax as well as Advance Tax under section 49 of Income Tax Ordinance 2001.

Similarly, they failed to observe that Federal Government is not a Sahib-e-Nisab under Zakat and Usher Ordinance 1980. It appeared as they are running their Directorate and various saving centres without properly comprehending the relevant rules and regulation.

Hence, National Saving Centre is bound to repay/refund the amount of Rs10,820,734 deducted as advanced tax and Rs986,225 deducted as Zakat to the Ministry of Education immediately and necessary improvement in working of National Saving Centre by imparting proper training and refresher courses be arranged for the officers dealing with property and rights of the public, the FTO observed.

While upholding Tax Ombudsman’s decision, the President of Pakistan has also expressed his strong displeasure and observed that the Government of Germany donated Rs13.707 million in 1993-94 for purchasing of paper to enable printing of cheap textbooks. This money was not used until today. For almost 30 years, while we are asking for grants and loans internationally.

Then because of an audit objection, it was deposited in the special savings certificate on 23.07.1999to 23.07.2014.During this time the government policy for SSC was for automatic roll over every three years that did not require investor’s prompting.

The Ministry of Education had forgotten totally about it.

However, this sleeping investment had now increased to Rs54,265,500. The money that was supposed to be used for paper to make cheaper school textbooks laid in an investment scheme which is indeed shameful.

The ministry did not bother, did not care, and totally forgot about a foreign grant given for paper for cheaper textbooks 30 years ago.

Accordingly, the president of Pakistan directed the Ministry of Education to conduct an inquiry, hold specific people responsible and take action against them according to law.

He also directed to submit a report to the FTO within 45 days.

Copyright Business Recorder, 2022

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