The Federal Board of Revenue (FBR) plans to deactivate around 500,000 SIM cards after Eidul Fitr to improve tax compliance. This move targets individuals who have either not filed their tax returns or have under-reported their taxes. The FBR is aiming at 400,000 people who have not paid enough taxes and 100,000 who have not filed returns at all, despite being notified about their obligations.
This effort is a collaboration between the FBR and the Pakistan Telecommunication Authority (PTA) to identify tax defaulters. A senior FBR official confirmed that after Eid, the FBR will issue an Income Tax General Order (IGTO) to begin the SIM deactivation process.
Telecom companies have raised concerns about the potential consequences of deactivating a large number of SIM cards. Initially, the FBR identified two million potential tax defaulters, but it decided to start with deactivating 500,000 SIM cards as a first step.
The FBR’s strategy leverages its powers under the Income Tax Law 2023, which allows the disconnection of mobile, electricity, and gas services for non-compliant individuals. This is part of the effort to address the drop in tax return filings from 5.9 million in 2022 to 4.2 million in 2023. Through this measure, the FBR hopes to encourage more people to fulfill their tax obligations and broaden the tax base.
