LUMS Receives Tax Exemption & People Are Asking Questions

LUMS fee hike lums tax
Source: The Current

LUMS was highly criticized in May after the administration imposed a massive increase of 41% in tuition fees. The university administration responded to the backlash by blaming the extraordinary inflation and energy costs.

The university is in the hot debate again as various reports suggest that the institution has received tax exemption from the government.

Investigative journalist Adeel Raja in his tweet while tagging the Prime Minister, Imran Khan questioned the decision considering the university can pay taxes as it is charging massive fees from the students.

Also Read: LUMS Responded To Backlash Against Fee Hike But Students Aren’t Buying It!

While responding to the journalist Federal Minister for Science and Technology said, “Institutions like LUMS should actually be helped to raise their rankings on international standards”.

Helping LUMS to raise its ranking through tax exemption doesn’t make much sense at all but LUMS does have a non-profit status which makes it eligible for the concession.

Also Read: LUMS Just Increased Its Semester Fee by 41% Amid COVID-19 & WTF!

LUMS was created by the non-government organization “The National Management Foundation” as a non-profit education institution and page 155 of the income tax ordinance of Pakistan does have a provision of tax credit as it states “income of a university or other educational institution being run by a non-profit organization existing solely for educational purposes and not for purposes of profit.”

However, this is not a permanent status and requires documentation and approval from the revenue commission and the status is awarded for a certain period of time as the income ordinance in section 36(c) states “approved by the Commissioner for specified period, on an application made by such person in the prescribed form and manner, accompanied by the prescribed documents and, on requisition, such other documents as may be required by the Commissioner.”

LUMS then is only entitled to tax exemption only if they have submitted proper documentation and have received approval from the commissioner.

Dr. Shabaz Gill also shed light on the matter which means LUMS’ non-profit organization status will only be in place if they submit the required documents and fulfill the requirements.

Share in the comments section if you have anything to add to this story?