In a significant move to broaden the tax base, Pakistan telecom operators have agreed to initiate the manual blocking process of SIMs belonging to tax evaders.
On May 12, Pakistan telecom operators agreed to start the manual blocking process in small batches for tax evaders, thereby ending a week-long standoff over the implementation of the tax machinery drive. This understanding was reached after the Federal Board of Revenue (FBR) held crucial meetings with the Pakistan Telecommunication Authority (PTA) and telecom operators.
Implementation of Income Tax General Order No. 1
The meetings were aimed at implementing Income Tax General Order No. 1, issued under Section 114 B of the Income Tax Ordinance 2001. On April 30, the FBR released a comprehensive list of 506,671 individuals who failed to file their tax returns for 2023. As a penalty, their mobile phone SIMs will be promptly blocked.
Pakistan Telecom Operators’ Response
Initially, telecom providers objected to the decision and delayed its execution, which was made under an act of parliament. However, after several deliberations, the telecom operators agreed to initiate the manual blocking process in small batches until their systems are fully equipped to automate it.
Pakistan Telecom Operators: Compliance Regarding SIM Blocking
The first batch, comprising 5,000 non-filers, was communicated to the telecom operators for compliance regarding SIM blocking. Subsequent batches will be sent to them daily. Moreover, telecom operators have also commenced sending messages to non-filers regarding blocking SIMs for intimation purposes.
The FBR held significant meetings with the PTA and telecom operators across Pakistan to ensure the effective implementation of ITGO. These meetings addressed the enforcement of measures to disable the mobile phone SIMs of non-filers for the tax year 2023. Multiple discussions were held to streamline the process and ensure compliance with tax regulations.
FBR’s Appreciation for Stakeholders
This collaboration underscores the commitment of FBR and telecom operators to uphold tax regulations and ensure compliance among taxpayers. It also signifies a significant step towards enhancing tax collection and enforcement mechanisms.
In the same way, FBR appreciates the cooperation of all stakeholders involved in these discussions and looks forward to continued collaboration to strengthen tax compliance in Pakistan.
Identification of Potential Taxpayers
The selection criterion was simple. Individuals must have declared taxable income in the past three years. However, they did not file returns for the tax year 2023.
The Active Taxpayers List (ATL) shows interesting data. The FBR received 4.2 million taxpayers until March 1. This is against 3.8 million returns from the same period last year.
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