Pakistan

FBR and Telecom Operators Agree on SIM Block Strategy for Tax Non-Filers

The Federal Board of Revenue (FBR) and telecom operators have reached a consensus on blocking the SIM cards of non-filers in Pakistan. This move comes as part of the government’s efforts to curb tax evasion and improve revenue generation in the face of challenging economic conditions.

The decision to block SIM cards was initially met with resistance from telecom operators, who argued that the FBR’s directive was a violation of the Pakistan Telecommunication (Re-Organisation) Act 1996, license conditions, and regulations. The Pakistan Telecommunication Authority (PTA) had also previously rejected the tax authority’s directions, stating that such an order would not have legal bindings and was contrary to the legal framework.

After extensive discussions and negotiations, the FBR announced that telecom companies have agreed to commence the manual blocking process of SIMs in small batches. This approach will continue until their systems are fully equipped to automate the process. The first batch, comprising 5,000 non-filers, has already been communicated to the telecom operators, with more batches to follow on a daily basis.

Despite reaching an agreement, the FBR has decided to move court against the PTA and telecom companies for not blocking SIMs of non-filers by a certain deadline. The FBR has consulted with its legal team to file a petition in the Islamabad High Court against telecom companies, including PTA, for not complying with the orders to block the SIM cards of non-filers.

Telecom operators have begun sending messages to non-filers regarding the blocking of their SIMs for intimation purposes. The public is urged to comply with tax regulations and file their returns to avoid any inconvenience. The FBR has also requested a compliance report from the telecom operators by a specified date.

The agreement between the FBR and telecom operators marks a pivotal step in the government’s tax reform initiatives. While the implementation of SIM blocking faces legal challenges and operational hurdles, the consensus reflects a collaborative effort to enhance tax compliance and broaden the tax base in Pakistan.

The government, led by Prime Minister Shehbaz Sharif, has been clear in its directive to the PTA and telecom companies: deactivate the SIM cards of tax defaulters. This measure is seen as a crucial step in ensuring tax compliance and improving the nation’s fiscal health.

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