The Federal Board of Revenue’s (FBR) initiative to deactivate around 500,000 SIM cards of non-compliant individuals represents a significant step towards enhancing tax compliance in Pakistan. By targeting individuals who have either under-reported their taxes or failed to file returns altogether, the FBR aims to address the issue of tax evasion and broaden the tax base.
This enforcement action is a result of the FBR’s efforts to expand its reach and improve tax collection mechanisms. Through collaboration with the Pakistan Telecommunication Authority (PTA), the FBR has identified individuals who have not fulfilled their tax obligations despite receiving notices. The decision to deactivate SIM cards is backed by the Income Tax Law 2023, which grants the FBR authority to disconnect mobile, electricity, and gas services for non-compliance.
The timing of this initiative, scheduled after Eidul Fitr, is strategic, as it provides individuals with ample time to rectify their tax filings before facing consequences. The issuance of the Income Tax General Order (IGTO) post-Eid signals the beginning of the process, indicating a firm commitment from the FBR to enforce tax laws effectively.
While initially identifying two million potentially non-compliant individuals, the FBR has decided to limit the first phase to 500,000 SIM deactivations after consultations. This phased approach demonstrates a measured response, allowing for adjustments based on feedback and minimizing potential disruptions.
The collaboration between the FBR and telecom companies is crucial, considering the potential repercussions of widespread SIM disconnections. By addressing concerns raised by telecom companies, the FBR ensures a smoother implementation process and mitigates any adverse impacts on communication services.
Furthermore, this initiative aims to reverse the decline in tax return filings witnessed in recent years. By holding non-compliant individuals accountable and leveraging technological advancements, the FBR seeks to improve revenue collection and strengthen Pakistan’s fiscal position.
