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Defaulters: Pakistan to block SIM cards of over 5 lakh tax evaders’ mobile phones

Defaulters: Pakistan to block SIM cards of over 5 lakh tax evaders’ mobile phones

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Virendra Pandit

New Delhi: In a surprise move, nearly bankrupt Pakistan has decided to block the SIM cards of more than five lakh defaulters as part of the drive to take action against tax evaders to force them to pay up or suffer.

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 until restored by the FBR or the Commissioner Inland Revenue having authority over the person, the media reported on Wednesday.

It ordered the Pakistan Telecommunication Authority (PTA) and all telecom providers to immediately implement ITGO to block their SIMs and file a compliance report by May 15, Dawn News reported.

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 board 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 5.9 million income tax returns.
According to an 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 emphasized 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.

It 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.


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