Pakistan Telecommunication Operators took action on Saturday by blocking the mobile phone SIMs of more than 3,500 individuals who hadn’t filed their taxes out of the 5,000 cards they had pledged to the Federal Board of Revenue (FBR) in accordance with the Income Tax General Order (ITGO). This measure aims to urge 506,671 individuals to submit their tax returns for 2023.
The Federal Board of Revenue (FBR) also issued warnings to approximately 5,000 individuals, informing them that their mobile phone SIMs would be deactivated if they failed to file their tax returns. Additionally, the FBR has requested details of the blocked SIMs from the telecom operators.
In accordance with the plan, the FBR has dispatched a second batch of 5,000 non-filers to the telecom companies, which have agreed to gradually block the SIMs manually until their systems are fully equipped to automate the process. The third batch is scheduled to be sent on Sunday.
Sources indicate that an automated system will be introduced to verify the SIMs targeted for blocking by the telecom companies. During a meeting on Saturday, the telecom companies provided a preliminary compliance report to the FBR regarding the messaging and SIM blocking of the first batch of non-filers.
Despite initial resistance from the telecom companies, who cited their obligation to provide uninterrupted services, they eventually agreed to block the SIMs of non-filers after multiple discussions with the FBR. This collaboration demonstrates the commitment of both the FBR and the telecom operators to enforce tax regulations and ensure taxpayer compliance, aiming to enhance tax collection mechanisms.
Moreover, the FBR has decided to impose a 90% withholding tax instead of the previous 2.5% on non-filers. This means that 90% of the mobile phone balance loaded by prepaid and postpaid non-filers will be automatically deducted and transferred to the FBR. Failure to comply with tax filing requirements will result in additional taxes being levied on subsequent purchases and mobile usage by non-filers.
The PTA has been provided with data on the SIMs of non-filers for blocking. If the SIMs are not blocked by May 15, the FBR will pursue legal action against the telecom companies, potentially seeking court intervention to enforce compliance.