Telecom operators, on May 10, agreed to start blocking SIM cards of non-filers, following the Federal Board of Revenue’s (FBR) directive, after a week-long standoff.
The decision came after crucial meetings between FBR, Pakistan Telecommunication Authority (PTA), and telecom operators to implement Income Tax General Order No. 1.
5000 SIMs to be blocked daily: FBR
The FBR identified 2.4 million potential taxpayers who were previously not on the tax rolls and issued notices to them. Out of these, over 500,000 individuals have been selected who failed to file their tax returns for 2023, resulting in their mobile SIMs being blocked as a penalty.
Initially met with objections from telecom providers, the manual blocking process will now be initiated gradually until systems are fully equipped to automate it.
The FBR sent the first batch of 5,000 non-filers’ names to telecom operators for SIM blocking, with subsequent batches to follow daily.
Telecom operators have also begun sending notifications to non-filers about the impending SIM blockage.
Assistance from LTO
The Large Taxpayer Office (LTO) in Islamabad is set to provide full assistance to the FBR in blocking the SIM cards of 506,671 non-filers. This support will involve monitoring the telecom operators under its jurisdiction.
To kickstart this effort, LTO officials were expected to visit telecom offices on May 13, particularly those falling within Zone-IV of LTO, Islamabad.
There’s a likelihood that tax officials will visit the headquarters of these telecom operators to assess the progress of enforcing actions against individuals who have not filed their income tax returns.
The Active Taxpayers List (ATL) indicated a marginal increase in tax returns compared to the previous year, with over 4.2 million taxpayers recorded until March 1. However, in tax year 2022, FBR received 5.9 million income tax returns, indicating potential for further tax compliance improvements.
The collaborative effort between FBR, PTA, and telecom operators is aimed to ensure effective implementation of tax regulations and enhance tax collection.