Pakistan Cracks Down on Tax Evasion: Over 3,500 SIM Cards Blocked
In a bid to enhance tax collection and enforce compliance, Pakistan's Federal Board of Revenue (FBR) has embarked on a comprehensive campaign, targeting non-filers. As part of this initiative, telecom operators across the country have blocked mobile phone SIM cards of over 3,500 individuals who have failed to file their income tax returns.
This move aligns with the FBR's Income Tax General Order (ITGO), which mandates telecom companies to cooperate in blocking SIM cards of non-filers. The board has identified a total of 506,671 individuals who have yet to file their returns for the 2023 tax year.
In addition to blocking SIM cards, the FBR has also issued warnings to approximately 5,000 individuals, urging them to fulfill their tax obligations or face similar consequences. The board has requested detailed information regarding the blocked SIM cards from the telecom operators.
To streamline the process, the FBR is implementing an automated system to verify the SIM cards that need to be blocked by the telecom companies. This system will expedite the blocking process and ensure accuracy.
Initially, telecom companies expressed resistance to the FBR's directive, citing their obligation to provide uninterrupted services to customers. However, following a series of meetings with the FBR, they agreed to collaborate in blocking the SIM cards of non-filers.
This cooperation underscores the commitment of both the FBR and telecom operators to uphold tax regulations and promote compliance among taxpayers. The move marks a significant step towards enhancing tax collection and strengthening enforcement mechanisms in Pakistan.
Furthermore, the FBR has announced plans to impose a substantial withholding tax of 90% on non-filers, replacing the previous rate of 2.5%. Under this revised policy, 90% of the mobile phone balance loaded by prepaid and postpaid non-filers will be automatically deducted and transferred to the FBR.
This means that if a non-filer recharges their phone with 100 Pakistani rupees (PKR), 90 PKR will be automatically deducted and deposited with the tax authority.
Sources within the FBR have indicated that if non-filers persist in evading their tax obligations despite having their SIM cards blocked, they will be liable to pay an additional 90% tax on any new SIM card they purchase.
Additionally, the FBR will impose the additional tax every time a non-filer recharges their SIM balance or utilizes calling and mobile data plans.
The data pertaining to the SIM cards of non-filers that require blocking has been handed over to the Pakistan Telecommunication Authority (PTA). The FBR has set a deadline of May 15 for the telecom companies to block the identified SIM cards. Failure to comply with this directive could result in legal action against the companies.
The FBR is actively collaborating with its legal team to explore legal recourse against telecom companies that defy the order. These efforts reflect the government's unwavering determination to combat tax evasion and ensure equitable revenue collection for the nation's development.
