ISLAMABAD: The telecom operators on Friday agreed to initiate the manual blocking process in small batches of non-filers, ending the week-long standoff over the implementation of the tax machinery drive to broaden the tax base.

The understanding was reached after the Federal Board of Revenue (FBR) held crucial meetings with the Pakistan Telecommunication Authority (PTA) and telecom operators to implement Income Tax General Order No. 1, issued under Section 114 B of the Income Tax Ordinance 2001.

On April 30, the FBR released a comprehensive list of 506,671 individuals who failed to file their tax returns for 2023. As a penalty, their mobile phone SIMs will be promptly blocked. However, telecom providers objected to the decision and delayed its execution, which was made under an act of parliament.

An official announcement issued by the FBR said that after several deliberations, the telecom operators have agreed to initiate the manual blocking process in small batches until their systems are fully equipped to automate it.

FBR sends names of 5,000 non-filers for stoppage

In this regard, the first batch, comprising 5,000 non-filers, was communicated to the telecom operators on Friday for compliance regarding SIM blocking.

Subsequent batches will be sent to them daily. Moreover, Telecom operators have also commenced sending messages to non-filers regarding blocking SIMs for intimation purposes.

FBR has held significant meetings with the PTA and telecom operators across Pakistan to ensure the effective implementation of ITGO. These meetings addressed the enforcement of measures to disable the mobile phone SIMs of non-filers for tax year 2023.

Multiple discussions were held to streamline the process and ensure compliance with tax regulations. This collaboration underscores the commitment of FBR and telecom operators to uphold tax regulations and ensure compliance among taxpayers.

It also signifies a significant step towards enhancing tax collection and enforcement mechanisms. FBR appreciates the cooperation of all stakeholders involved in these discussions and looks forward to continued collaboration to strengthen tax compliance in Pakistan, the announcement added.

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 has selected over 0.5 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 these individuals did not file their returns for tax year 2023.

According to the Active Taxpayers List (ATL), the FBR received 4.2m taxpayers until March 1, as against 3.8m returns received over the corresponding period of last year. It shows a marginal increase during the period under review.

In tax year 2022, FBR received 5.9m income tax returns.

Published in Dawn, May 11th, 2024