Good News for Teachers: Tax Rebate Reinstated @25%–Federal Tax Ombudsman Notification

FTO Directs Immediate Withdrawal of Letters Against 25% Tax Rebate for Teachers–Official Notification Issued:

The Federal Tax Ombudsman (FTO) Secretariat Islamabad has officially issued a directive dated 21^st April 2025, confirming the reinstatement of the 25% tax rebate for teachers across Pakistan. This development comes as a relief to thousands of government-employed educators, following an earlier dispute where Field Formations of the FBR had issued controversial letters disallowing the rebate.

This issue sparked widespread protests and concern, prompting discussions between the Federal Government and representatives of the All Government Grand Alliance of Employees. As per the agreement dated 10^th March 2025, and with subsequent approval by the Federal Cabinet through the Income Tax (Second Amendment) Bill, 2025, the teachers’ rebate has been officially retained.

The FTO has now formally asked the Federal Board of Revenue (FBR) to withdraw all letters issued to Withholding Agents and Salary Disbursing Authorities that denied this tax rebate. This move clears the way for smooth processing of salary rebates and disposal of all pending complaints related to the matter. Please find notification:

FEDERAL TAX OMBUDSMAN SECRETARIAT
5-A CONSTITUTION AVENUE ISLAMABAD

F. No. 07/DC/REG/2025                                                                                                                                                                                                                                                              Dated: 21.04.2025

To

The Member Inland Revenue (Operations).
Federal Board of Revenue,
Islamabad

SUBJECT:             ISSUANCE OF NOTICES TO WITHHOLDING AGENTS/SALARY DISBURSING AUTHORITIES REGARDING TEACHERS REBATE @25%

In continuation to FTO Sectt’s letter of even number dated 11.04.2025, on the subject.

2.            It is mentioned that earlier Representatives of the Federal Government agreed to withdraw, ab-initio, the letters issued by Field Formations of FBR regarding not allowing of teachers tax rebate vide an agreement executed with the Representatives of All Government Grand Alliance of Employees dated 10.03.2025. Subsequently, the Federal Cabinet also approved the retention of teachers rebate through approval of Income Tax (Second Amendment) Bill, 2025.

3.            In view of above referred decision of the Federal Government and the Federal Cabinet, FBR is required to immediately withdraw the letters issued by the Filed Offices to Withholding Agents thus facilitating disposal of complaints.

Registrar

Teachers Rebate Victory Reinstated After Strong Advocacy – FTO Orders Clear the Path:

This notification from the Federal Tax Ombudsman is not only a win for Pakistan’s dedicated teaching community but also a reflection of positive policy responsiveness from the Federal Government. By restoring the 25% teachers tax rebate, the government has shown that it values educators’ role in national development and is committed to honoring previously agreed-upon benefits.

The directive ensures that no further confusion exists for Withholding Agents, Accounts Officers, or DDOs responsible for monthly payroll. All Field Formations of the FBR are now bound to comply with this new policy direction immediately.

Teachers who faced deduction discrepancies or denied rebates are now eligible to reclaim their rightful exemptions under this new directive. We advise all concerned employees and departments to verify implementation and coordinate with local tax offices where needed.

Stay updated about Latest Government Notifications! Join our WhatsApp channel “Vocal Government Employees” for instant government notifications, policy updates, and important news tailored for public sector employees. Stay informed, stay ahead! Join now.