ISLAMABAD: In response to the pressing economic challenges, the Federal Board of Revenue (FBR) is taking swift action to address non-compliance among taxpayers, particularly non-filers and under-filers, by initiating the blocking of 500,000 SIM cards.
Sources reveal that the FBR plans to issue an Income Tax General Order (IGTO) following Eid-ul-Fitr, with arrangements already in place for the SIM card blockage within the current month.
Last year, the FBR was granted additional authority under Section 114B of the Income Tax Ordinance 2001 to disconnect utility services and block mobile SIM cards in cases where individuals fail to file their tax returns despite receiving notices.
Furthermore, to expand the tax base, the FBR established 145 district tax offices, aiming to bring 1.5 to 2 million new taxpayers into the system by June 2024.
Consultations have also been held between the FBR and the Pakistan Telecommunication Authority (PTA) to identify 400,000 SIM cards belonging to under-filers, along with an additional 100,000 SIM cards belonging to non-filers, identified through the Broadening to Tax Base (BTB) initiative.
While the FBR identified two million potential tax evaders, it has decided to initially target 0.5 million SIM cards in the first phase, considering concerns raised by telecom companies regarding the feasibility of blocking such a large number of SIM cards.
The FBR received 5.9 million income tax returns in tax year 2022, but this number decreased to 4.2 million in tax year 2023 by March 2024, aligning with the Active Taxpayers List (ATL) due to approximately 1.8 million individuals failing to file their returns.
In addition, the government has launched the Tajir Dost Scheme, aimed at registering wholesalers, retailers, and other traders in Karachi, Lahore, Peshawar, Quetta, Islamabad, and Rawalpindi to broaden the tax base. Failure to register by the April 30 deadline will result in monetary penalties under section 182 of the Income Tax Ordinance 2001.
