ISLAMABAD: The Federal Board of Revenue (FBR) claimed on Wednesday that as many as 7,167 individuals had filed their returns for the tax year 2023 after their mobile SIMs were blocked, as part of a drive to enforce a law that allows the stoppage of cellular services to individuals who fail to comply with the country’s tax laws.

Since May 14, the FBR has sent around 60,000 CNICs of non-filers to three major telecom companies — Telenor, Ufone and Jazz — to disable their SIM cards. The FBR did not have information about the number of SIM cards issued to 60,000 non-filers.

FBR spokesperson Bakhtiar Khan confirmed that the tax department had received 7,167 more income tax returns for the year 2023, adding that the FBR shared CNIC data with the telecom service providers in 12 batches of 5,000 each.

Tax compliance with the first batch was as low as 508 return filings that rose to 1,514 in the last batch received on May 28. The SIMs of non-filers were activated shortly after they filed their returns and confirmation by the tax department.

On April 10, the telecom operators agreed with the FBR to initiate the manual blocking process in small batches. The first batch comprising 5,000 non-filers was communicated to the telecom operators for compliance on May 14. Since then 12 batches of data were shared with the telecom companies.

While the three companies started blocking the SIMs, a fourth firm — Zong — had moved the Islamabad High Court against the Income Tax General Order No 1 (ITGO-No1) seeking a stay against its implementation.

The court restrained the federal government from taking any coercive action against the petitioner, but it did not issue any stay to stop the blocking of non-filers’ SIMs. The hearing will resume on June 5.

The FBR has also constituted an 18-member joint working group (JWG) with the three main telecom operators to continue the manual blockage of non-filers. The JWG has representatives from the Pakistan Telecommunication Authority (PTA), Ufone, Telenor Pakistan and Jazz. However, Zong has no representation on the JWG.

On April 30, the FBR released a comprehensive list of 506,671 individuals who failed to file their tax returns for 2023.

The FBR has identified 2.4 million potential taxpayers who did not exist on the tax rolls. Notices were subsequently issued to these individuals. The FBR selected over half a million individuals out of the 2.4m for SIM blockade based on one criterion: they must have declared taxable income in one of the past three years and did not file their returns for tax year 2023.

According to the Active Taxpayers List, the FBR has received 4.2m tax returns till March 1, as against 3.8m received over the corresponding period last year, showing a marginal increase during the period under review.

Published in Dawn, May 30th, 2024