In a strong crackdown on non-filers amid the prevailing financial crisis facing the cash-strapped country, the government on Tuesday ordered the Pakistan Telecommunication Authority (PTA) and telecom companies
Income Tax General Order (ITGO) to deactivate the mobile telephone SIM of the following persons , who are not on the list of active taxpayers, but are required to file an income tax return for the tax year 2023 in accordance with the provisions of the Income Tax Ordinance of 2001.
The development came a day after Prime Minister Shehbaz Sharif hinted at the implementation of “massive economic reforms” at a special meeting of the World Economic Forum (WEF) in Riyadh, Saudi Arabia.
Speaking at the closing plenary of the WEF’s special session, the prime minister promised to introduce deep-rooted reforms and meaningful austerity measures to bring the country out of economic crisis.
The FBR has asked PTAs and all telecom operators to ensure compliance with the Income Tax General Ordinance (ITGO) with immediate effect.
The tax collector further said, “The compliance report in this regard is to be submitted to the FBR on May 15.”
The FBR has released the names of 506,671 non-filers and said these individuals are not filing income tax returns despite having taxable income.
The mobile SIM cards of these individuals could be blocked at any time, the FBR added. These persons are not listed in the list of active taxpayers, read the statement.
The top tax collector further said that the “strategic move” shows its commitment to tax compliance among taxpayers. The aim of this step is to strengthen the tax base with the support of the concerned state holders, the FBR added.
“FBR is committed to promoting a fair, just and uniform tax system in the country.
It further said that non-registrants can renew their mobile phone SIM cards by filing their 2023 tax return.
It is pertinent to mention here that the tax collector secured additional powers last year in a bid to increase tax cleanliness and was empowered under Section 114B of the Income Tax Ordinance 2001 to disconnect utility connections and block mobile SIM cards if returns are not filed in response to notices issued to them.
In November 2023, up to 145 district tax offices were established across the country as part of the restructuring measures, which were expected to bring 1.5 to 2 million new taxpayers into the tax net by June 2024.
Besides, the FBR also consulted the PTA to identify the SIM cards of the subordinates who had not filed their returns despite being taxable and duly informed by the authority which had their transaction records available.
“We have finalized the details of this tough action against alleged tax evaders and their mobile phone SIM cards will be blocked by April 2024,” a senior official told The News earlier this month.
Sources said that though the FBR has identified two million potential tax evaders, it has been decided that only 0.5 million SIM cards will be blocked out of them in the first phase due to concerns of telcos about the feasibility of blocking SIM cards in such a large number.
It is important to know that the FBR received a total of 5.9 million income tax returns in the tax year 2022, but it dropped to 4.2 million in the tax year 2023 to March 2024, according to the Active Tax Payers List (ATL) as around 1, 8 million. they did not file a return.
Last month, the government, in its bid to widen the tax base, began registering traders under its Tajir Dost Scheme in a bid to bring five major categories of traders into the tax net.
The move, titled ‘Tajir Dost Scheme’, will target wholesalers, dealers, retailers, furniture and decoration showrooms, jewellers, cosmetics, food, medical and hardware stores, meat, vegetable and fruit stores, motor vehicle showrooms, fertilizers, pesticides and chemical dealers in Karachi, Lahore, Peshawar, Quetta Islamabad and Rawalpindi.
Under the scheme, which was launched earlier this month, tax collection will be set to take effect from July 1. Traders who fail to register by the April 30 deadline will face monetary penalties under Section 182 of the Income Tax Ordinance 2001.
