KARACHI: President of Pakistan has rejected the representation filed by central directorate of national savings against the findings of federal tax ombudsman (FTO) and ordered inquiry to ministry of education.

As per details, The representation filed by the Central Directorate of National Saving (CDNS) filed a representation before the president against the order of the Federal Tax Ombudsman, 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 Rs. 10,820724 /- deducted as advance tax and Rs .986225/- 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 Reference before the FTO and Ministry of Finance.

Briefly, the Ministry of Education received funds of Rs.13.707 million as donation from the German Government in 1993-94 which were invested in the National Savings Scheme (NSS) of the Central Directorate of National Savings  (CDNS) at National Saving Centre Islamabad. In pursuance of 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 Rs 73.668 million However, in the light of the PAC’s directions, the Departmental Accounts  Committee in its meeting held in FEB 2020 decided to retrieve the funds and deposit 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 Rs  54,265,571 /- after deducting Rs 10,820,734/- against WHT as well as Rs 986,225/- as Zakat, total amount of Rs.54,265,571 was deposited in the Government Treasury. However, when the report was placed before the PAC, the committee issued the referred directions to PAO of the M/O E& PT.

Therefore, the Ministry took up the matter with the Tax Ombudsman who observed that the case underhand reflected inefficiency and incompetence of the concerned officers/officials of National Saving Centre’s, 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 Centre’s without properly comprehending the relevant rules & regulation.

Hence, National Saving Centre is bound to repay/refund the amount of Rs 10,820,734/- deducted  as advanced tax and Rs 986225/- 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,FTO observed.

While upholding Tax Ombudsman’s decision, Hon’ble President of Pakistan has also  expressed  his strong displeasure and observed that:

·         Government of Germany donated  Rs. 13.707 million in 1993-94 for purchasing of paper to enable printing of cheap text books

·         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 special savings certificate on 23.07.1999 to 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 Rs 54,265,500/- The money that was supposed to be used for paper to make cheaper  School text books layed 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 text books 30 years ago.

Accordingly, Hon’ble 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 FTO within 45 days.