Pakistan to take legal action against companies resisting to block SIM cards of tax evaders

Over 500,000 people, who are not on the taxpayer list are liable to file their income tax returns for 2023


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A man uses the social media platform X on his phone at a market in Islamabad. — AFP file
A man uses the social media platform X on his phone at a market in Islamabad. — AFP file

Published: Sat 4 May 2024, 7:16 PM

The Pakistan government on Friday decided to legally move against any telecom operator or others trying to create hindrances in disabling the mobile phone SIMs of over half a million tax evaders, The Express Tribune reported.

The decision was taken during Pakistan Finance Minister Muhammad Aurangzeb's meeting at the Federal Board of Revenue (FBR) headquarters where Attorney General for Pakistan Mansoor Usman Awan was also present.

Government officials said the FBR had briefed the finance minister about its decision to disable the mobile phone SIMs of 506,671 individuals, who were not appearing on the active taxpayer list but were liable to file their income tax returns for 2023.

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The issue of lack of cooperation by the Pakistan Telecommunication Authority (PTA) under the pressure of the telecom operators in the implementation of the decision was also discussed.

It was decided that the government would move against anyone who tried to create hurdles in the way of bringing these non-filers of their income returns into the tax web, The Express Tribune reported.

The finance minister told the participants of the meeting that the army chief had also backed the decision of blocking the SIMs of non-filers and there was no reason for anyone to oppose the move.

In a news statement, the PTA advocated striking a balance between the FBR's move to disable SIMs and protecting the telecom operators' investment.

"Our foremost objective is to uphold compliance within [the] regulatory framework and relevant legal provisions while safeguarding the interests of telecom consumers," it added.

Although the government will disable the SIMs of over half a million people, there is no restriction on them to buy new ones.

The finance minister was informed that the FBR was also developing a mechanism to unblock the SIMs of those individuals, who would file their returns.

The FBR had issued notices to 2.4 million people, but it has moved against only 506,000 individuals in the first phase.

One person may have more than one SIM card and all of those connections will be cut off with immediate effect, said a senior FBR official.

He said about 1 million to 1.5 million SIMs would be blocked because of the FBR order.

Under a parliament law, every person earning Rs600,000 annual income or owning at least 1,000 cc car or a house is liable to file the annual tax statement.

The finance minister was also informed about the lack of progress in bringing the retailers in the tax net. The FBR's campaign to voluntarily register retailers has fallen apart with only 75 of them availing the scheme.

The minister instructed the FBR to start the compulsory registration of the retailers.

The government of Prime Minister Shehbaz Sharif had launched the voluntary tax registration scheme to bring in about 3.2 million retailers, who remained outside the tax net.

It had given a month's time to these retailers to voluntarily register with the tax machinery — a deadline that lapsed this Tuesday.

So far, only 75 retailers have registered themselves with the FBR, said the officials.

This shows the stubbornness on the part of the retailers, who are hell bent on staying away from the tax system, the report said.

The FBR said that it would move legally against the retailers, who still remained outside the tax net.

The scheme had initially been launched only in six cities — Lahore, Karachi, Islamabad, Peshawar, Quetta and Rawalpindi.

Some of the non-filer retailers may be among those whose SIMs are being blocked with immediate effect.

The issue of the PKR 2.7 trillion disputed tax revenue was also discussed in the meeting.

It was agreed that only those cases would be taken up for speedy disposal by the higher courts where the FBR had met with success at the stage of commissioner appeals and appellate tribunals.

The government has abolished the first tier of commissioner appeals in the hope of swift recovery of the disputed revenues.

However, it emerged during the meeting that the entire sum of Rs2.7 trillion could not be recovered as the FBR had opted for going into appeals in cases where it did not have a strong legal basis, The Express Tribune reported.

An FBR statement read that various issues including pending legal cases came under discussion during the meeting.

It was decided to devise a holistic strategy to actively pursue all the pending legal cases for early recovery of the stuck-up revenue, it added.

It was further decided that the government would enhance the fees of the FBR lawyers, who were normally paid Rs100,000 and Rs150,000 per case in a high court and the Supreme Court respectively.

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