ISLAMABAD: In a drastic measure, the Federal Board of Revenue (FBR) has directed the telecom operators to block the SIMs of over 0.5 million non-filers and come up with compliance reports by May 15. The FBR has published the names of non-filers whose SIMs will be blocked within 15 days.
A list of 5,006,671 non-filers has been shared with the Pakistan Telecommunication Authority (PTA) and telecom operators.
The FBR possesses the powers to prosecute those not complying with the Income Tax General Order (ITGO). The IGTO will enforce the filing of returns by the persons not appearing on the active taxpayers list but are liable to file the income tax returns for the tax year 2023 under the provisions of Income Tax Ordinance, 2001.
“In exercise of the powers conferred under Section l14B of the Income Tax Ordinance, 2001, the Federal Board of Revenue (FBR) is pleased to issue this Income Tax General Order (ITGO) to disable the mobile phone SIMs in respect of the following persons who are not appearing on the active taxpayer list but are liable to file the Income Tax Returns for Tax Year 2023 under the provisions of the Income Tax Ordinance, 2001.
“The Pakistan Telecommunication Authority (PTA) and all telecom operators are required to ensure the compliance of this ITGO with immediate effect. The compliance report in this regard is required to be furnished with the FBR till May 15, 2024. The mobile SIMs identified in the ITGO will remain blocked until restored by FBR,” said an order issued by the board.
Top sources in the FBR said notices had been issued to the potential two million non-filers asking them to file the returns. Two notices were issued to non-filers but they never bothered to file their returns. The telecom operators had raised a hue and cry against the initial demand of the FBR to disconnect two million SIMs and finally it was decided that the mobile SIMs of 0.5 million potential non-filers would be disconnected in the first phase.
Also, top official sources confirmed to The News Tuesday night that the much-hyped Tajir Dost Scheme had miserably failed, as only 75 persons got themselves registered with the FBR till April 30. Now the government has made Naeem Meer, the retailers’ leader, as coordinator to liaise between the government and retailers and convince the latter to come into the tax net. Earlier, the FBR high-ups had claimed that the registration number had crossed the 100 persons mark but the final results show a totally bleak and dismal picture.
On the other hand, the FBR has faced a shortfall of Rs53 billion in achieving the tax collection target set for the outgoing month (April 2024).
The increasing tussle in the FBR in the aftermath of unceremonious removal of senior officers, politicization and replacement of many as well as import curtailment also made it hard for the tax machinery to achieve the desired tax collection target.
The FBR did not release any official figures Tuesday night. It seems after witnessing a revenue shortfall of Rs53 billion, the FBR preferred to keep mum over official figures.
Till April 29, the FBR was facing a shortfall of Rs157 billion but on the last day (April 30) it fetched revenues of over Rs100 billion and collected Rs0.654 trillion against the desired target of Rs0.707 trillion for April 2024. The total shortfall of April 2024 stood at approximately Rs53 billion. Now it seems the FBR will be facing the daunting task of getting the annual target of Rs9.415 trillion on June 30, 2024. An amount of Rs7.369 trillion was collected during the July-April period of the current fiscal year.
After securing the consent of the IMF, the major target was readjusted for the last quarter (April-June) period where the FBR would have to collect over Rs1.242 trillion. The FBR requires Rs2.046 trillion in the last two months (May and June) for achieving the desired annual tax target of Rs9.415 trillion on June 30, 2024. With the consent of the IMF, the monthly targets were readjusted, as for April 2024 it was fixed at Rs0.707 trillion, Rs0.745 trillion for May 2024 and Rs1.245 trillion June 2024. The FBR collected Rs6.71 trillion in the first nine months (July-March) of the current fiscal against the target of Rs6.7 trillion agreed with the IMF.
In the wake of a slowdown in imports, it would be difficult for the FBR to achieve the desired target (Rs9.415 trillion); however, higher inflationary pressures have so far helped the FBR in jacking up revenues and post a growth of 30 percent in the first nine months of the current fiscal year.
Dr Khaqan Najeeb, former adviser to the Ministry of Finance, said appropriate design of a reform program, consultation with experts, engagement with relevant trade bodies and then proper and effective implementation were the important facets to make a scheme successful. “In the case of Tajir scheme, we were trying to register nearly 3 million traders under the advance tax regime, the same people who had earlier rejected a paltry fixed tax.”
Dr Khaqan felt that it wasn’t clear to the community what would be the penalty or impact of not registering. “Nadra has collated good data from the bank accounts, utility bills, travel etc. Digitization has helped but it’s again the ability to do data mining, conduct tax gap analysis and develop risk profiles to identify where tax is payable and gaps exist needing attention. This would send the right signals that the authorities are serious about focusing on areas of low compliance,” said Dr Najeeb.