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Sunday November 17, 2024

FBR move to block Sims of non-filers hits snags amid reluctance of telecom firms

By Mehtab Haider
May 03, 2024
Headquarters of the Federal Board of Revenue in Islamabad. — APP/File
Headquarters of the Federal Board of Revenue in Islamabad. — APP/File

ISLAMABAD: The FBR has not yet been able to convince the PTA and telecom operators for blocking SIMs of over 0.5 million non-filers within deadline of 15 days.

The FBR has been conveyed that the cellular companies are reluctant so far and this issue needs further deliberations before implementing it in true letter and spirit.

According to a statement issued by Pakistan Telecommunication Authority (PTA) that PTA is currently deliberating on recent decision made by FBR. “We are engaged with cellular mobile operators and stakeholders concerned on this matter,” the statement said.

“Our foremost objective is to uphold compliance within regulatory framework and relevant legal provisions while safeguarding the interests of telecom consumers. Any progress/updates on the matter will be conveyed accordingly,” the statement concluded.

The FBR has issued Income Tax General Order (ITGO) giving direction to disconnect SIMs of cellular phone of 0.5 million non-filers and share compliance report till May 15, 2024.

The FBR possessed information about 2 million non-filers having their transaction details and notices were dispatched to them but they never filed their returns. There will be 0.1 million non-filers who have been identified by Broadening to Tax Base (BTB) of the FBR and their SIMs would also be blocked.

The FBR identified 2 million potential tax dodgers but there was hue and cry from the mobile companies that they could not afford disconnection of SIMs of such massive number.

After holding detailed discussions among the FBR, PTA and telecom operators, the FBR high-ups claimed the decision was taken that 0.5 million SIMs would be blocked in the first phase to convey crystal clear messages.

The FBR possessed powers to block SIMs of phones and disconnect other utility services such as electricity and gas connections of potential tax dodgers.

The FBR received total income tax returns of 5.9 million in tax year 2022 but it dropped to 4.2 million in tax year 2023 till March 2024 in line with Active Taxpayer List (ATL). Around 1.8 million did not file their returns.

Under Section 114 (B) of Income Tax Law 2023, the FBR possessed powers to enforce filing of returns. It states (1) Notwithstanding anything contained in any other law for the time being in force, the Board (FBR) shall have the powers to issue income tax general order in respect of persons who are not appearing on active taxpayers’ list but are liable to file return under the provisions of the Ordinance.

(2) The income tax general order issued under sub-section (1) may entail any or all of the following consequences for the persons mentioned therein, namely:– (a) disabling of mobile phones or mobile phone SIMs; (b) discontinuance of electricity connection; or (c) discontinuance of gas connection. (3) The Board or the Commissioner having jurisdiction over the person mentioned in the income tax general order may order restoration of mobile phones, mobile phone SIMs and connections of electricity and gas, in cases where he is satisfied that — (a) the return has been filed; or (b) person was not liable to file return under the provisions of the Ordinance. (4) No person shall be included in the general order under sub-section (1) unless following conditions have been met with, namely:– (a) notice under sub-section (4) of section 114 has been issued;

(ii) utility connections; (iii) business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer; (iv) types of businesses; and (v) such other information as may be prescribed; (c) shall be signed by the person being an individual, or the person’s representative where section 172 applies; and (d) shall be filed electronically on the web prescribed by the Board. (3) A taxpayer’s profile shall be furnished,- (a) on or before the 31st day of December, 2020 in case of a person registered under section 181 before the 30th day of September, 2020; and (b) within ninety days registration in case of a person not registered.

(b) date of compliance of the notice under sub-section (4) of section 114 has elapsed; and (c) the person has not filed the return. (5) The action under this section shall not preclude any other action provided under the provisions of the Ordinance, it concluded.