ISLAMABAD: The Federal Tax Ombudsman (FTO) has instructed the Federal Board of Revenue (FBR) to ensure that teachers and school staff performing supervisory and invigilation duties, along with paper marking, are not subjected to withholding tax under Section 153 of the Income Tax Ordinance 2001. Instead, these payments should be classified under the salary head as per Section 149.

The directive follows complaints from government school teachers in Gujranwala, who, in addition to their teaching responsibilities, conduct supervision, invigilation, and paper marking for the Board of Intermediate & Secondary Education (BISE) Gujranwala. Currently, their remuneration from the board is taxed under Section 153(1)(b) (services rendered) rather than under the salary category, which the FTO considers an act of maladministration.

According to the FTO’s ruling, payments for these duties fall under the scope of employment and should be taxed accordingly under Section 149. It emphasized that such services are a fundamental part of the education system, directly linked to evaluating and grading students based on the curriculum taught by the same teachers.

The FBR has been directed to coordinate with the Regional Tax Office (RTO) Gujranwala and BISE Gujranwala to rectify the tax classification for affected teachers. The FTO highlighted that teachers are assigned these duties as part of their official responsibilities, without the ability to negotiate remuneration, which is set by the Boards of Governors (BOGs) of education boards.

Furthermore, the ruling noted that many primary school teachers and lower invigilation staff earn below the taxable income threshold but are still subject to tax deductions under Section 153(1)(b). The FTO urged a review of this practice to ensure fair taxation.