Pakistan Cracks Down on Tax Evaders: Over Half a Million Mobile SIM Cards Blocked

The Federal Board of Revenue (FBR) issued an order announcing the blocking of SIM cards belonging to 506,671 individuals who failed to file their tax returns for the year 2023. These SIMs will remain blocked until restoration by either the FBR

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In a decisive move against tax evasion, authorities in Pakistan have opted to block the mobile phone SIM cards of more than half a million users. This stern action is part of a broader initiative to enforce tax compliance and expand the taxpayer base in the country.

The Federal Board of Revenue (FBR) issued an order announcing the blocking of SIM cards belonging to 506,671 individuals who failed to file their tax returns for the year 2023. These SIMs will remain blocked until restoration by either the FBR or the Commissioner Inland Revenue, as outlined in the directive.

Additionally, the federal law enforcement agency has instructed the Pakistan Telecommunication Authority (PTA) and all telecom service providers to promptly execute the order to block the SIM cards and submit a compliance report by May 15.

An official revealed to Dawn that the FBR has identified 2.4 million potential taxpayers who were absent from the tax rolls. Notices have been dispatched to these individuals as part of the effort to bring them into the tax net.

From this pool of potential taxpayers, over half a million have been selected for SIM card blockade based on a specific criterion: they must have declared taxable income in one of the past three years but failed to file their returns for the tax year 2023.

According to the Active Taxpayers List (ATL), the FBR received returns from 4.2 million taxpayers until March 1, 2024, marking a marginal increase compared to the previous year’s figures. In tax year 2022, a total of 5.9 million income tax returns were submitted to the FBR.

The FBR official quoted by Dawn also revealed that SIM cards will be automatically restored for individuals who file tax returns for the year 2023. This measure underscores the FBR’s efforts to incentivize tax compliance, particularly among low-income groups, with the aim of augmenting the number of return filers.

The blockade of SIM cards represents a novel and straightforward measure adopted by the FBR to encourage tax compliance, a move that holds promise on paper and could potentially yield positive results in expanding Pakistan’s taxpayer base.

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