The Pakistani government instructed the Pakistan Telecommunication Authority (PTA) and telecom companies to block the SIM cards of over 500,000 individuals who have not filed their taxes.
The Federal Board of Revenue (FBR), utilizing powers under section 114B of the Income Tax Ordinance, 2001, mandated disabling mobile phone SIMs for those not appearing on the active taxpayer list who must file an income tax return for the Tax Year 2023.
The FBR has ordered immediate compliance with this directive from the PTA and all telecommunications operators. SIMs will remain blocked until the FBR or the relevant Commissioner of Inland Revenue restores them. A compliance report is due back to the FBR by May 15.
The FBR publicly released the names of 506,671 non-filers who have taxable income but have not filed returns. These individuals’ mobile SIMs are subject to being blocked, and they are not listed as active taxpayers.
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Last year, the FBR was granted enhanced powers to widen the tax net, including the authority to disconnect utilities and block mobile SIMs for non-compliance. In line with these powers, in November 2023, the FBR established 145 district tax offices to bring 1.5 to 2 million new taxpayers into the system by June 2024.
The FBR has also been working with the PTA to identify SIMs of individuals who have failed to file returns despite notifications and possession of taxable income. Although two million potential non-compliant taxpayers were identified, only 500,000 SIMs will be blocked in the first phase due to operational concerns from telecom companies.
According to the Active Taxpayers List (ATL), the number of income tax returns filed dropped from 5.9 million in the tax year 2022 to 4.2 million in the tax year 2023 as of March 2024.