Tax exemption withdrawal: Teachers, researchers threaten nationwide protests, demand reversal of decision

Published: June 18, 2013
Worry that move will lead to brain drain.

Worry that move will lead to brain drain.


Higher education professors and researchers have come out strongly condemning the government’s decision to withdraw the 75 per cent tax exemption on salaries they were previously given.

Pakistan Academy of Sciences (PAS) and International Islamic University Islamabad (IIUI) professors in separate press conferences and a consortium meeting respectively warned of a series of protests if the government did not reverse their decision.

“On one hand, the government continues to stress on the importance of quality education and research in universities, while on the other hand it is dissuading talented Pakistanis living overseas to join domestic institutions,” said PAS Secretary General Dr Anwar Nasim.

The Federal Board of Revenue, in light of the new Finance Bill 2013-14, withdrew five major income tax exemptions to generate additional revenue.

The withdrawals included one on a 75 per cent tax exemption on the salaries of professional teachers and researchers at accredited institutes.

“By adopting such measures, it will be difficult for the country to retain quality teachers and researchers. The anticipated brain drain will seriously hamper scientific output and warrants a critical review,” said PAS Vice-President Dr MD Shami.

Shami requested the finance minister to take back this decision keeping in mind the Pakistan Muslim League — Nawaz’s strong emphasis on education and research in its manifesto.

Dr MN Butt, a PAS official, said that the tax incentives were offered a decade ago to promote the quality of teaching and research in Pakistan. “It helped attract Pakistani academicians living abroad to Pakistan,” he said.

Former Quaid-i-Azam University (QAU) professor Dr Asghari Maqsood said the government’s decision would have far reaching implications for the higher education sector.

“Teachers from private institutions with short-term contracts and no benefits or perks will be the most affected by this decision,” she remarked.

Professors from IIUI, AIOU, QAU, NUML and other universities unanimously decided that they would take all measures to reverse the government’s decision during a consortium meeting at IIUI.

“We have agreed to wait till the Federation of All Pakistan Universities Academic Staff Association (FAPUSA) meeting on Saturday in Lahore,” FAPUSA Islamabad chapter president said while speaking to The Express Tribune.

Published in The Express Tribune, June 18th, 2013.

Facebook Conversations

Reader Comments (14)

  • Faraz Kakar
    Jun 18, 2013 - 1:03PM

    Pakistan has spent billions on research and development in the last decade but the result has been nothing. What has been the contribution of our ”learned researchers” in the field of science and technology despite getting this huge amount of investment? How many Made-in-Pakistan patent products created by these so-called PhDs are successfully sold in international market? Investment in R&D is worth only if it creates wealth by introducing new technologies and creating jobs. The army of PhDs with their junk literature raised by the HEC has done nothing to improve the economic conditions of Pakistan. Its high time we direct money to primary and secondary education instead of funding the junk research by the so-called foreign qualified PhDs who are not even willing to pay taxes.


  • Ali Tipu
    Jun 18, 2013 - 3:34PM

    This is outrageous by the government.I fail to understand, why aren’t we imposing taxes on businessmen, landlords, agriculture sector, stock exchange because that’s why the real revenue is being generated and money is stolen. Why are they making the life’s of ordinary, middle class and talented Pakistanis miserable by imposing more taxes on them? This will propel huge brain drain and all the developments and progress that we have seen over the past few years in terms of rankings and research will be null and void.


  • Anoni
    Jun 18, 2013 - 4:10PM

    It wrong for goverment to treat working class as rich. The working class barely make our end meet and pay all the taxes including , income tax at source , GST on every thing we use, with holding tax with no return or facility for taxes we pay and yet we the working class is taxed and burdened the most.

    Perhaps Mr. Dar should get his fact right. The working class is not rich. It’s a middle class.


  • Ali
    Jun 18, 2013 - 5:54PM

    @Faraz Kakar: Reaping the benefits of education takes time. True, we may not have world class scholars as yet, but we do have process in place. It will take a generation before we have the kind of scientific discourse many western countries do. However, in order to achieve such scientific progress we need trained personel to stay. Removing the 75% tax free clause would not leave much incentive for scholars to stay. For example, a PhD from a foreign university as an Assistant Professor would earn about 80,000 ten years ago. The Euro exchange rate was Rs.70 = 1 Euro, about 1100 Euros a month. Now because of the real cost of inflation and currency depreciation the Euro is equal to Rs. 130. So an assistant professor earning 100,000 is actually getting around 800 Euros a month. Even at a pathetic foreign institution a PhD researcher can easily rake in 250% more. So why would anyone be committed to staying?
    On another issue, investment in R and D involves taking risks. Normally, in commercial industries you can expect up to 80% of new product failure. So why should research in Pakistan be an exception to the rule? The path dependency of creating meaningful innovations inherently will always involves failures. Having a wider range of scholars working on innovations is far better than a smaller group as you have the chance of diversifying failure risk over many new potential projects. If some don’t work others might. True, one could conter argue that we don’t have the resources to take such risks, that is why managing the risk process is essential. And the first step is to have string brains behind the innovation. By cutting salaries via taxation you’re ending up paying peanuts. Monkeys only come for peanuts, not world class scholars.


  • Faraz Kakar
    Jun 18, 2013 - 6:53PM

    ET: A slightly long comment but please allow.

    @Ali: The case of higher education is a typical example of misplaced priorities. In a country with 5.4 million children out-of school, where the salary of primary school teacher is less than that of a driver, it is injustice for Assistant Professor (AP) to even demand 800 Euros. Is it fair to compare the salaries of our AP with the European salary scale given the huge difference in living cost? How many countries exempt professors from paying taxes? How about comparing the salaries of AP with a primary school teacher in Pakistan?

    Innovation and creativity flourishes in a society when the education system creates thinking minds, not memorizing parrots. These skills are best acquired if student gets a conducive environment for years in school and college. It is not possible to acquire these skills in a year or two of University education. Our primary and secondary school teacher lives the life of manual laborer. Can they ever dream of going to Europe for a month course, let alone 4 years of PhD?

    Lastly, the tragedy in Pakistan is not a high product failure rate despite high R&D investment. The pathetic quality of research is because projects are designed for the sake of getting funding, not because of a genuine curiosity to create something new. Not to mention the prevalence of plagiarism and the honesty of researchers. I studied for one year in the UK in 2010 and was heartbroken to see most HEC funded scholars trying to get UK immigration rather than achieve something in their field and return to serve the country that gave them everything.


  • rizwan
    Jun 19, 2013 - 4:21PM

    99.9 % phds are worthless of no use and to be thrown out in garbage fraud phds usualy phd s from private universities in all fields .our agriculture research zero chemisrty zero and worthless physics zero big zero bio sciences big big zero fittay munh to all 2 no scholors wasting time and money of nationRecommend

  • Paki
    Jun 22, 2013 - 2:16AM

    Yeah right. Mr Rizwan, your ignorance and illiteracy has contributed more to the condition Pakistan is in today than any “useless” PhD. It’s people like you who are responsible for the brain drain from Pakistan.


  • Aik Paki
    Jun 22, 2013 - 9:31AM

    @Rizwan, @Faraz Kakar — I am surprised to see the comments that indicate your level of thinking about the Profs and people of high intellect. Please note it is not the research only it is the training these Profs provide in conducting research that will suffer in the long run. First of all you have the Seths who also earn money from the private educational institution and now the Government is hitting hard to these hardworking researchers and teachers. Do you know how much is the salary of an experienced professor? In North America/Singapore, it is $150,000 to $200,000 per year. This is the salary of a Paki professor who works in Singapore. Please open your eyes as well as brain also. These poor Paki professors will soon go to Kuwait, England, Canada, and America. What left for your children will be junk. You may be thinking of sending your children abroad for education – good luck to you as they will stay there and call you via Skype :)


  • Faraz Kakar
    Jun 22, 2013 - 2:50PM

    @Aik Paki: Thank you for enlightening us with your high intellect. So, Professors in Pakistan should not be taxed and their salaries should be comparable to the salaries of North American Professors? If salary is the sole criteria of people of high intellect to serve their country, well then not only professors but everyone should leave the country. I do not deny the contribution of our academicians. They have done a lot for the country and it is their right to work abroad if they get better opportunities. But don’t forget that Pakistan has done a lot for them too. How many Professors would have done PhDs abroad without state sponsorship?
    As for the gloriousness of research work by our universities, I don’t need to defend my argument. It is visible to people of any level of intellect that the billions invested by HEC on R&D were wasted. It would have been much better to spend this money on schools and colleges rather than fraudulent research project designed solely to get money.


  • Adnan
    Jun 23, 2013 - 1:54PM

    @Faraz Kakar:
    The fact is that teachers working on HEC payscales are not entitled to pension/retirement benefits/perks (like staff cars, recreation spots etc) that are normally available to bureaucrats, army guys. tax rebate was the only incentive which is no more. About the industry not benefiting from research, it is the industry’s job to make use of research results which they are reluctant to do because the industrialists/seths in the industry want quick bucks. They dont want to invest their time and money into research.


  • Jawaid
    Jun 23, 2013 - 3:06PM

    Totally agreed. I was working in the industry before I got a chance to go for higher studies. I chose education and research because of my own passion, but now I feel I made a wrong choice. My ex-colleagues who are still working in the process industry or moved to the oil sector are earning salaries and perks much more than me. My advice to the youngsters at the same cross road as my self: dont follow your passion and stay away from research if you want to survive in Pakistan.


  • Ahsan Abdullah
    Jun 23, 2013 - 5:56PM

    @Faraz Kakar:
    The industry will neither hire PhD’s nor make use of their research. Progressive industries all over the world, like Rolls Royce, BP etc (if you spend some useful time in the UK you might know) do have PhD’s working for them, unlike the Pakistani industry. If you are so concerned about HEC scholars staying in Pakistan, ask your beloved Pakistani industry to hire them. They have the same basic degrees, only a higher one in addition. and what have industry managers have, the same basic degree plus an attitude that comes with money. Mind you the industry will take a short cut. Instead of investing in research and improve quality, they form cartels, monopolies, bribe government officials and force substandard products on the Pakistani consumers. The only sector which hired HEC scholars has shown progress with Pakistani university rankings rising considerably as compared with 1990’s.


  • Faraz Kakar
    Jun 23, 2013 - 8:53PM

    @Ahsan Abdullah: ”Sawal gandum, Jawab chana.” I am afraid you missed the point by few miles. I am talking about the HEC funded research and how billions were wasted by our learned researchers by getting funding on their almost fraudulent research projects and publishing garbage research. The issue of Industries not investing in R&D and not employing researchers is a completely different topic. If I was an industrialist, I would value creativity and originality far more than degrees and quantity of articles. A genuine innovative research will always be valued by the private sector because it creates wealth. If it isn’t valued, than something is wrong with its quality. Don’t blame industry for that.


  • Ahsan Abdullah
    Jun 24, 2013 - 3:52PM

    @Faraz Kakar:
    If your industry were valuing quality research, they would have been producing quality products, not the junk they are dumping in the market and forcing on consumers in collaboration with corrupt officials. Open your eyes and stop dreaming.


More in Pakistan