Non-filers likely to face mobile SIMs, electricity, gas disconnections

Finance Bill 2022-23 empowers FBR to ensure annual income tax returns under Section 114B of Income Tax Act

In the budget for the next financial year, it has been proposed to give the Federal Board of Revenue (FBR) powers that in addition to disconnecting electricity and gas connections of consumers who do not file income tax returns, will also authorise it to deactivate mobile phone SIMs.

The federal government's Finance Bill 2022-23 empowers FBR to ensure annual income tax returns under Section 114B of the Income Tax Act and take action against active taxpayers who are not submitting returns as required under the law. “The FBR can take action against those people who are obliged to submit income tax returns but are not doing so.”

According to the Income Tax General Order issued under Sub-section 2 of Section 42 of the Income Tax Ordinance, the FBR will disable mobile phones or SIMs of those users who do not file returns. In addition, electricity and gas connections will also be disconnected.

Read more: FBR collects Rs5.4tr in taxes

Similarly, in the Income Tax General Order, the board or the commissioner having jurisdiction may order restoration of the mobile phone, cellphone SIMs as well as electricity and gas connections if he is satisfied that the annual income tax return has been submitted.

In addition, no person shall be included in the general order under Sub-section (1) unless the following conditions have been fulfilled, i.e. notices have been issued under Sub-section (114) (a).

Also read: Govt policies hurt tax revenue: FBR

According to the said section of the Income Tax Ordinance, if the date of compliance has passed and the person has not filed the return, the law will come into force.

“Further action against anyone cannot be stopped under this law.”

The finance bill will be presented to the National Assembly for approval and after that it will be implemented from the next financial year – starting July 1, 2022.