In post-Eid swoop on tax dodgers, FBR to block 0.5m Sim cards

ISLAMABAD: As part of a stern action against tax-dodgers, the Federal Board of Revenue (FBR) has finalised a plan to block five lakh [0.5 million] SIMs of mobile phones of non-filers and under-filers after Eidul Fitr.

The SIMs [Subscribers identity module] will be blocked within the ongoing month, The News has learnt.

Top official sources confirmed to The News on Monday that the FBR would issue Income Tax General Order (IGTO) after Eidul Fitr as preparations were made in consultation with Pakistan Telecommunication Authority (PTA) for identifying four lakh [0.4 million] under-filers, who did not bother to file their returns despite possessing taxable income. The FBR possessed information about their transactions and notices were dispatched to them, but they never filed their returns. There will be one lakh [0.1 million] non-filers, who have been identified by Broadening to Tax Base (BTB) of the FBR and their SIMs would also be blocked.

“Yes, we have finalised details of this stringent action against alleged tax evaders and their SIMs of mobile-phones would be blocked by April 2024,” one top official said.

Sources said the FBR identified potential tax dodgers of two million, but there was hue and cry from the mobile companies that they could not afford disconnection of SIMs of such massive number. After holding detailed discussions among the FBR, Pakistan Telecommunication Authority (PTA) and telecom operators, a decision was made that five lakh SIMs would be blocked in the first phase to convey crystal clear message that the FBR was serious in taking action against tax dodgers.

The FBR possessed powers to block SIMs of phones and disconnect other utility services such as electricity and gas connections of tax dodgers.

The FBR received total income tax returns of 5.9 million in tax year 2022, but it dropped to 4.2 million in tax year 2023 till March 2024 in line with Active Taxpayers List (ATL). Around 1.8 million did not file their returns.

Under Section 114 (B) of Income Tax Law 2023, the FBR possessed powers to enforce filing of returns. It states “(1) Notwithstanding anything contained in any other law for the time being in force, the Board (FBR) shall have the powers to issue income tax general order in respect of persons who are not appearing on active taxpayers’ list but are liable to file return under the provisions of the Ordinance.

“(2) The income tax general order issued under sub-section (1) may entail any or all of the following consequences for the persons mentioned therein, namely: (a) disabling of mobile phones or mobile phone SIMs; (b) discontinuance of electricity connection; or (c) discontinuance of gas connection.

“(3) The Board or the commissioner having jurisdiction over the person mentioned in the income tax general order may order restoration of mobile phones, mobile phone SIMs and connections of electricity and gas, in cases where he is satisfied that — (a) the return has been filed; or (b) person was not liable to file return under the provisions of the Ordinance.

“(4) No person shall be included in the general order under sub-section (1) unless following conditions have been met with, namely: (a) notice under sub-section (4) of section 114 has been issued; (ii) utility connections; (iii) business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer; (iv) types of businesses; and (v) such other information as may be prescribed; (c) shall be signed by the person being an individual, or the person’s representative where section 172 applies; and (d) shall be filed electronically on the web prescribed by the Board.

“(5) A taxpayer’s profile shall be furnished, (a) on or before the 31st day of December, 2020 in case of a person registered under section 181 before the 30th day of September, 2020; and (b) within ninety days registration in case of a person not registered. (b) date of compliance of the notice under sub-section (4) of section 114 has elapsed; and (c) the person has not filed the return.

“(6) The action under this section shall not preclude any other action provided under the provisions of the Ordinance,” it concluded.