Arif Alvi blamed the Ministry of Education for the mis-use of Germany’s gift, which totalled Rs13.707 million, between 1993 and 1994. Education ministry was criticized for criminal waste, incompetence and carelessness.
A contribution made 30 years ago to buy paper so that low-cost textbooks could be printed has gone unutilised to this day, while the government seeks grants and loans from across the world to satisfy its vital requirements, according to him
The president ordered the Ministry of Federal Education and Professional Training to launch an investigation, hold particular individuals accountable, and take appropriate legal action against those individuals.
Not to burden retired persons with the burden of such investigations, but to make a report to the FTO within 45 days, he warned.
Alvi noted this in his judgement today on the appeal of the Central Directorate of National Savings (CDNS) against the verdict of the Federal Tax Ombudsman.
That money sat in the non-profit-making account for six years, and no one worried about it, he claimed. He said that if it had been an officer’s own funds, he would not have let a single day pass before investing it in a profit scheme.
He pointed out that Rs17,490,730 in losses had accrued because of the money being idle, much exceeding the initial investment of Rs13.707 million.
The audit also revealed that even this loss might have been far worse.
From July 23, 1999, through July 23, 2014, they put the money in a Special Savings Certificate, according to the president. SSC was subject to automatic three-year rollovers as a matter of government policy.
According to him, there was not a single Government of Education employee who cared about this money after 23-03-2014, when the automated rollover of investment halted. The ministry left the full sum to stay idle producing no return.
It was disgusting conduct by the Ministry of Education, he said, that the principal sum and profit, which had risen to Rs54,265,500, had been parked in an investment programme without being utilised for the purchase of materials for cheaper school textbooks.
Following a government directive to transfer monies from several departments’ accounts to the national treasury in 2020, an audit found this egregious oversight in the German grant account.
Because of an audit objection that led to the money being withdrawn, the issue of Zakat deduction and withholding tax was raised.
President Alvi continued his remarks by criticising the Ministry of Education on two fronts. Because of criminal carelessness, Pakistan’s citizens were robbed of Rs36,357,051 in profit that might have been gained if the money had been spent correctly 30 years ago when a foreign grant was issued for paper for cheaper textbooks.
As far as he could tell, the Ministry of Education had also failed to get the documents necessary to claim exemption from withholding tax and Zakat deductions, which were permissible under current policy.
Withholding tax and Zakat were deducted since the CDNS did not get an exemption certificate, which once again reflects negatively on the Ministry of Education’s capacity to manage government investment safely and effectively.
The CDNS was exonerated by the president because they were working in good faith and that Zakat and withholding taxes were deducted because of the lack of exemption certificates.
Exemption certificates with retroactive effect should be requested from the FBR and Zakat Department by the Ministry of Federal Education and Professional Training. Also, the FBR and Zakat Department should consider the issuance of Exemption Certificates on a “One Time Basis” under the Rules and Regulations, according to the President.
