The Federal Board of Revenue (FBR) has decided to block 500,000 mobile phone SIMs of tax evaders as the decision has been endorsed by its chairman. In this regard, the FBR has sent relevant rules to the officers concerned.

According to sources, the FBR has identified two million tax evaders, but mobile service providing companies requested the tax authority that they could not afford to block such a large number of SIMs. In response to the request, it was decided that 500,000 mobile phone SIMs of tax evaders would be blocked.

Pakistan has a very low tax-to-GDP (gross domestic product) ratio of less than 10%, which is way below the regional average. The government needs to boost revenue receipts to meet its growing expenditures, which have forced it to make huge borrowing, resulting in accumulation of an unsustainable debt.

The government can increase tax collection through targeting the untapped sectors and nabbing the tax dodgers.

The International Monetary Fund (IMF) has also asked Pakistan to raise its tax collection, which will be helpful in curtailing the government’s burgeoning budget deficit.

Sources said that the FBR had powers to disconnect SIM cards and electricity connections of non-filers of taxes. About 145 district tax officers have been granted special powers for taking action against such consumers. The non-filers will be dealt with under Section 114B of the tax law. Action will also be taken against the people who do not submit their tax returns.

According to FBR’s sources, around four million under-filers of taxes have been identified in cooperation with the Pakistan Telecommunication Authority – the regulatory body of the telecom sector. These are the individuals who have not filed their tax returns despite having a taxable income. The FBR will issue an Income Tax General Order soon.

The FBR sent notices to such persons but tax returns have not yet been filed. The non-filers have been identified under the FBR’s drive for broadening the tax base and their SIMs will be blocked.

In this regard, the decision has been finalised after detailed discussions between the FBR, PTA and telecom operators.

Published in The Express Tribune, April 14^th, 2024.

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