Pakistan blocks 210,000 SIM cards of users who failed to submit tax returns – Firstpost

In a bid to expand its revenue base, Pakistan blocked 210,000 SIM cards belonging to users who had not submitted tax returns. The measure comes after the Federal Board of Revenue (FBR) issued a directive in April.

According to FBR data, only 5.2 million people out of Pakistan's population of over 240 million have filed income tax returns in 2022. Of the total number blocked, 62,000 have been reinstated.

Also Watch: Pakistan to block mobile SIM cards of tax defaulters | Vantage by Palki Sharma

“We have unlocked the SIM cards of those who have paid taxes,” FBR public relations officer Bakhtiar Muhammad told AFP, adding that no one came to pay taxes voluntarily. We have to create conditions for people to pay their taxes.

According to the telecom authority, Pakistan has more than 192 million mobile phone users and four telecom service providers. Pakistanis must register a SIM card using their national identity card number, usually for multiple connections.

“Access to telecommunications services is a basic human right and is critical for many other basic services, including access to information, education and emergency services,” an official at one of the four telecoms companies told AFP on condition of anonymity.

“We are talking to the authorities to convince them to use technology to help increase tax revenue, as sudden measures could disrupt the delivery of these critical services.”

The reason why Pakistan's budget is so controversial is that the National Assembly has recently not provided any relief to the middle class, but instead increased the effective income tax rate to 39% for salaried individuals and 44% for personal income tax for non-salaried individuals. This figure jumped to 50% from last year.

Interestingly, the Shehbaz Sharif government exempted active/retired bureaucrats and active/retired military personnel from income tax on the sale of properties.

Over the past five years, certain segments of society have lost nearly half their purchasing power, while taxes on already hard-pressed working-class people have increased.

Pakistan’s tax system exacerbates inequality and places a higher burden on those who cannot afford it. The International Monetary Fund has asked Pakistan to end all special tax regimes such as low-income taxes on investment gains in the stock market and bank deposits.

The global lender recommends treating these gains as part of normal income. The International Monetary Fund is urging Pakistan to increase the burden on wage earners until the country imposes higher taxes on non-wage earners.

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