FBR to block 5 lakh SIMs of non-tax filers after Eid

The Federal Board of Revenue (FBR), decided to block 5 lakh SIMs of tax dodgers or non-tax filers after Eid. FBR has made this decision in response to the deep economic crisis in Pakistan.

The FBR is taking immediate measures to fight violators among taxpayers, particularly non-filers and under-filers by blocking 500,000 SIM cards. FBR intends to issue an Income Tax General Order (IGTO) and block 5 lakh SIMs after Eid-ul-Fitr this month.

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The FBR has taken consultation with the Pakistan Telecommunication Authority (PTA) to identify 4 lakh SIM cards belonging to under-filers. An additional 100,000 SIM cards belong to non-filers as part of broadening the Tax Base Project.

While the FBR identified two million suspected tax dodgers, it has decided to target 5 lakh SIM cards in the first phase. However, telecom firms have raised concerns about the possibility of blocking such a huge number of SIM cards.

The FBR received a new legal authority under Section 114B of the Income Tax Ordinance 2001 to suspend utility services and disable mobile SIM cards last year. This condition applies to those, who do not complete their tax returns after receiving reminders.

Click here to read updates on the Tajir Dost Scheme launched by FBR to bring retailers into tax net

Furthermore, FBR has appointed 145 district tax offices. The goal is to bring 1.5 to 2 million new taxpayers into the tax system by June 2024. In addition, the government has created the Tajir Dost Scheme which aims to expand the tax base by registering wholesalers, retailers, and other businesses in major cities.

Lahore, Karachi, Peshawar, Islamabad, and Rawalpindi come under Tajir Dost Scheme. The registration began on April 1 and will end on April 30. However, failure to register under this scheme will result in monetary penalties under Section 182 of the Income Tax Ordinance 2001.

The FBR received 5.9 million income tax returns in tax year 2022. This figure fell to 4.2 million in tax year 2023 based on the Active Taxpayers List (ATL). Hence, about 1.8 million people failed to file taxes.