Budget 2025-26 Backlash Grows Over Proposal to Scrap Tax
I SLAMABAD, June 24, 2025 — Teachers and researchers across Pakistan have strongly condemned the federal government’s proposal to abolish the longstanding 25% tax rebate for academic professionals, calling it a “deliberate and destructive blow” to the country’s fragile higher education sector.
The Federation of All Pakistan Universities Academic Staff Associations (FAPUASA) and the All Government Employees Grand Alliance (AGEGA) jointly voiced their outrage during a press conference held at the National Press Club on Monday. They demanded the immediate restoration of the rebate and a significant increase in federal funding for higher education institutions.
“Not a Luxury, But a Lifeline”
Speaking at the press conference, FAPUASA President Prof. Dr. Mazhar Iqbal, AGEGA Chief Coordinator Rahman Ali Bajwa, and senior office-bearers including Dr. Mohammad Jadoon Khan and Dr. Iqbal Jatoi stressed that the rebate — set to be withdrawn from July 1 — had never been a luxury.
“It was a vital support mechanism for university faculty and researchers who often pay out of pocket for journal fees, research materials, and academic travel,” said Dr. Mazhar Iqbal. “Eliminating this rebate will demoralize scholars, stifle research productivity, and accelerate brain drain.”
A Timeline of Cuts and Contradictions
Originally introduced in 2006 by the Musharraf administration as a 75% tax rebate, the benefit aimed to promote academic research and retention. Over time, it was slashed to 40% by the PML-N government in 2013, and now faces complete abolition under the same party’s current tenure.
“The government’s actions reflect selective austerity,” said Rahman Bajwa. “They cite IMF objections to the rebate, yet no objections were raised when FBR purchased luxury vehicles worth billions or when parliamentarians raised their salaries by 600%.”
Shrinking Support Amid Growing Needs
The speakers noted that while Pakistan’s federal budget has ballooned from Rs5.9 trillion in 2018 to Rs17.5 trillion in 2025 — a 196% increase — higher education funding has stagnated, with recurring grants stuck around Rs65 billion. Meanwhile, the number of public universities has risen from 126 to 160, and operational costs have surged due to inflation and expansion.
According to the Economic Survey of Pakistan, the country spends just 0.8% of its GDP on education, and a meager 0.37% on higher education — well below the UNESCO-recommended 4–6%, and far behind neighboring countries like India and Bangladesh.
Both the PML-N and PPP, the speakers reminded, had pledged in their election manifestos to increase education spending to 4% of GDP — promises they have yet to fulfill.
Warning of University Shutdowns
Dr. Iqbal Jatoi warned that continued disregard for the teaching community’s concerns could spark a nationwide protest. “If the government fails to reverse this decision and increase the higher education budget to at least Rs200 billion, we will shut down universities across Pakistan.”
The speakers emphasized that any country aspiring to build a knowledge-based economy must first value its educators and researchers. “A nation that refuses to invest in its intellectual capital cannot survive or compete in the modern world,” said Dr. Mazhar.
