In a significant development, the Federal Board of Revenue (FBR) issued legally-binding instructions on Tuesday to block mobile phone connections of more than half-a-million non-filers. This move comes as part of the FBR’s efforts to enforce tax compliance and accountability among taxpayers across Pakistan.
The FBR’s campaign to voluntarily register retailers faced a setback, with only 75 retailers availing the scheme. Additionally, the tax collection for the 10-month period fell short of the goal by approximately Rs40 billion. Despite a 31% increase in collection during this period, the total collection amounted to over Rs7.38 trillion against the target of Rs7.414 trillion.
These developments follow growing resentment within the tax machinery over the government’s decision to remove 25 allegedly corrupt and inefficient officers. The general body of customs officers deliberated options, including the possibility of going on strike or filing mass leave applications.
The FBR’s Income Tax General Order (ITGO) directs the blocking of mobile phone SIMs belonging to 506,671 individuals who are not on the active taxpayer list but are required to file Income Tax Returns for Tax Year 2023. This measure, mandated by the Income Tax Ordinance, 2001, aims to ensure compliance with statutory tax obligations.
The FBR’s action targets individuals earning an annual income of Rs600,000 or owning at least a 1,000cc car or a house, as stipulated by parliament. Despite prior reminders and tax notices, many individuals failed to fulfil their tax obligations, prompting the FBR’s decisive action.
Chairman of the FBR, Malik Amjad Zubair Tiwana, emphasized the government’s commitment to pursuing non-filers. This initiative is not limited to the identified 500,000 individuals, indicating a broader effort to enhance tax compliance.
For Tax Year 2023, only 4.5 million individuals have filed their annual returns thus far, compared to 5.9 million filers for Tax Year 2022.
The FBR has instructed the Pakistan Telecommunication Authority (PTA) and telecom operators to comply with the blocking of SIMs and provide regular updates. Telecom operators are required to submit a compliance report to the FBR by May 15, 2024, ensuring transparency and accountability in the enforcement process.
This strategic initiative underscores the FBR’s commitment to fostering a culture of tax compliance and accountability among taxpayers, promoting financial stability and economic growth in Pakistan.
