Telecom operators on Saturday blocked mobile phone SIMs of over 3,500 non-filers of the 5,000 cards they had promised to the Federal Board of Revenue (FBR) they would in line with its Income Tax General Order (ITGO) -- a move aimed at compelling 506,671 individuals to place on record their returns for 2023.
The FBR also sent messages to about 5,000 individuals, warning them that their mobile phone SIMs would be blocked if they did not file their returns. It has further sought details of the blocked SIMs from the telecom operators.
As already notified, the board has sent the second batch of 5,000 non-filers to the telecom companies, which had agreed to initiate the manual blocking process of the SIMs in small batches until their systems were fully equipped to automate it.
The third batch will be dispatched on Sunday (today).
Sources said an automated system would be introduced to verify the SIMs to be blocked by the telecom companies.
The telecom companies have submitted a preliminary compliance report to FBR during its meeting on Saturday on sending messages and blocking the SIMs of the first batch of non-filers.
Despite the FBR issuing the ITGO, the telecom companies resisted the move by penning a letter to the IT ministry and Pakistan Telecommunication Authority (PTA) in which they wrote that they were mandated to provide uninterrupted services to their customers, except in circumstances specified in the Telecom Act and relevant regulations.
They added that there were no instances where they could disconnect or block service to any customer.
However, according to statement issued a day earlier, the telecom operators agreed to block the SIMs of non-filers after a series of meetings with the FBR
It added that this “collaboration” underscored the commitment of the FBR and telecom operators to uphold tax regulations and ensure compliance among taxpayers.
“It also signifies a significant step towards enhancing tax collection and enforcement mechanisms in the country,” the statement concluded.
Furthermore, the FBR has decided to impose a withholding tax of 90% instead 2.5% on the non-filers.
Under this decision, 90% withholding tax will be deducted from the mobile phone balance loaded by prepaid and postpaid non-filers through an automated system.
This means that if a non-filer loads a mobile phone balance of Rs100, Rs90 will be deducted automatically and transferred to the FBR.
Sources said if the non-filers still did not bring their returns into the system despite their SIMs being blocked, they would have to pay an additional 90% tax for any new one that they purchased.
They added that additional tax would be imposed every time a non-filer recharged their SIM balance as well as when they used their calling and mobile data plans.
The data about the SIMs of the non-filers that needed to be blocked has been handed over to the PTA.
The sources said if the SIMs of the non-filers were not blocked by May 15, the FBR would take legal action against the relevant telecom companies.
They added that the FBR was discussing this matter with its legal team and move the court against the telecom companies defying the order.
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