Here Comes The Taxman: Pak To Block SIM Cards Of More Than 506,000 People For Not Paying Taxes

Authorities in Pakistan have decided to block the mobile phone SIM cards of over half a million tax defaulters as part of the drive to take action against tax evaders.

The Federal Board of Revenue (FBR) in an Income Tax General Order (ITGO) said the mobile SIMs of 506,671 individuals, who failed to file their tax returns for 2023, will stay blocked until restored by the FBR or the Commissioner Inland Revenue having authority over the person.

It ordered the Pakistan Telecommunication Authority (PTA) and all telecom providers to immediately implement the Income Tax General Order (ITGO) no 01 of 2024 to block their SIMs and file a compliance report by May 15, Dawn News reported.

An official source said the FBR has identified 2.4 million potential taxpayers who did not exist on the tax rolls. Notices were subsequently issued to these individuals.

The FBR has selected over 0.5 million individuals out of the 2.4 million for SIM blockade based on one criterion: they must have declared taxable income in one of the past three years and these individuals did not file their returns for tax year 2023.

According to the Active Taxpayers List (ATL), the FBR received 4.2 million taxpayers until March 1, 2024, as against 3.8 million returns received during the same period of last year.

This shows a marginal increase during the period under review. In tax year 2022, FBR received a total of 5.9 million income tax returns.

According to the FBR official, SIMs will be automatically restored for persons who file tax returns for 2023.

Every Monday, FBR updates its ATL listings.

Every Tuesday, the names of persons who appear on the ATL list will be identified and submitted to the PTA and telecom companies for restoration.

The officer emphasised that there would be no separate restoration procedures, and the entire process would be completed automatically.

The blockade of SIM cards is a new easy measure taken by the FBR to encourage low-income people to submit their tax returns to increase the number of return filers, which appears to be a good idea on paper.

The FBR’s introduction of high withholding tax rates for non-filers follows a similar blueprint.

The FBR has focused its campaign on broadening the tax base for persons who did not appear on the tax roll. According to sources, persons who have filed their returns once can avoid paying high withholding tax rates in subsequent years. According to FBR sources, non-filers include one-time tax filers.