In a decisive move aimed at addressing the ongoing financial turmoil in Pakistan, the government has instructed the Pakistan Telecommunication Authority (PTA) and telecom companies to deactivate mobile phone SIM cards belonging to more than 500,000 individuals who have failed to file their tax returns.
According to a statement issued by the Federal Board of Revenue (FBR) on Tuesday, this action is authorized under section 114B of the Income Tax Ordinance, 2001. The FBR emphasized that these individuals, though not appearing on the active taxpayer list, are legally obligated to file income tax returns for the tax year 2023.
This development follows Prime Minister Shehbaz Sharif’s pledge to implement significant economic reforms during a special meeting of the World Economic Forum (WEF) in Riyadh, Saudi Arabia. The Prime Minister assured attendees of introducing substantial changes and adopting austerity measures to alleviate the country’s economic crisis.
The FBR has directed both the PTA and telecom operators to immediately comply with the Income Tax General Order (ITGO), ensuring the blockage of SIM cards belonging to non-filers. The affected individuals’ SIM cards will remain deactivated until restored by the FBR or the relevant Commissioner Inland Revenue.
Furthermore, the FBR has made public the names of 506,671 non-filers who have taxable income but have neglected to file their income tax returns. These individuals are not included in the list of active taxpayers, as stated by the FBR.
The tax collection body has set a deadline of May 15 for telecom companies to furnish a compliance report regarding the blockage of SIM cards. It reiterated that the objective behind this measure is to bolster tax compliance and broaden the tax base, aligning with the government’s commitment to a just and uniform tax system.
In a related effort to expand the tax net, the FBR established 145 district tax offices across the country last year, aiming to bring 1.5 to 2 million new taxpayers into the fold by June 2024.
Additionally, the FBR has collaborated with the PTA to identify SIM cards of under-filers, who despite possessing taxable income, have failed to file their returns despite notifications from the tax authority. This stringent action against alleged tax evaders underscores the government’s determination to enforce tax compliance.
Moreover, in a separate initiative to broaden the tax base, the government recently initiated the registration of traders under the “Tajir Dost Scheme.” Targeting five major categories of traders, this scheme seeks to enhance tax collection from various business sectors across major cities in Pakistan.
Traders failing to register by the April 30 deadline will face monetary penalties under section 182 of the Income Tax Ordinance 2001. This concerted effort by the government reflects its commitment to fiscal responsibility and economic stability amidst prevailing challenges.
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