Pakistan to block over 500,000 SIM cards for tax evaders


ISLAMABAD: In a bid to tighten tax compliance, Prime Minister Shehbaz Sharif's government has directed the Pakistan Telecommunication Authority (PTA) and other telecom companies to block the mobile SIM cards of over 500,000 people who have not submitted their tax returns.

A day earlier, Shehbaz Sharif pledged at the closing plenary of the World Economic Forum's special session in Riyadh to implement major austerity measures and implement long-term reforms to steer the country out of the current economic crisis.

The Federal Board of Revenue (FBR) on Tuesday directed the PTA and all telecom operators to ensure compliance with the Income Tax General Order (ITGO) which comes into force with immediate effect. “The FBR has taken decisive action by issuing orders to deactivate mobile SIM cards related to 506,671 individuals…who are not present in the list of active taxpayers but are obliged to file income tax returns,” the FBR said in a statement. Telecom operators must Submit compliance reports to the FBR before May 15 to increase transparency and accountability in the enforcement process.

“Through enforcement measures and collaboration with relevant stakeholders, FBR aims to strengthen the tax base and promote a fair and equitable tax system for the benefit of the country,” the FBR handout reads.

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“Until the mobile SIM card of the said individual is restored by the FBR or the Commissioner of Revenue (as the party has jurisdiction over the individual), they will remain blocked,” it added.

So far, only 4.5 million people have filed annual returns for tax year 2023, compared with 5.9 million people for tax year 2022.

The Sharif government has also launched a compulsory tax registration scheme to attract some 3.2 million retailers who remain outside the tax net. It gave the retailers a month to voluntarily register with the tax agency, a deadline that expired on Tuesday.

Officials said that as of now, only 75 retailers are registered with the FBR. This shows the stubbornness of retailers in refusing to comply with tax rules. The FBR has announced that it will take legal action against retailers who manage to evade taxes.



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