The Pakistan Telecommunications Authority (PTA) has declined the Federal Bureau of Revenue’s (FBR) request to deactivate the mobile phone SIM cards of over 500,000 individuals who did not file tax returns in 2023, as revealed on Saturday.
Earlier this week, the FBR published a detailed list of 506,671 non-filers, announcing the imminent blocking of their mobile phone SIM cards. The PTA and other telecom companies were instructed to comply with this directive.
This decision was outlined in Income Tax General Order (ITGO) no 01 of 2024, which stipulated that the SIM cards of these individuals would remain inactive until reinstated by the FBR or the Commissioner Inland Revenue.
In a statement released on Friday regarding the enforcement of ITGO, the PTA stated that it was beyond its jurisdiction to implement the order, thus asserting that the order would have no legal binding effect as it conflicted with the existing legal framework.
The PTA highlighted that factual discrepancies regarding SIM card usage against Computerised National Identity Cards (CNICs) needed verification, noting that individuals could register up to eight SIM cards (three data and five voice). Therefore, procedural steps, including notices issued by the tax collection authority as per section 144-B of the Income Tax Ordinance, 2001, were necessary before implementing ITGO.
The authority emphasized that executing the order would negatively impact social norms, particularly concerning SIM card registration predominantly under male names rather than females or juveniles, with only 27 percent of SIM cards registered under female CNICs.
Furthermore, the PTA expressed concerns that blocking SIM cards could hinder access to communication, especially for females and children engaging in educational activities, and potentially affect confidence in the telecom sector among foreign investors.
Additionally, the PTA cautioned that blocking SIM cards could disrupt financial transactions such as online payments, remittances, online banking, and e-health activities, leading to various complications.
The PTA recommended that instead of immediately blocking SIM cards, the FBR should explore alternative methods to encourage tax return filings, such as awareness campaigns. Moreover, the authority suggested a holistic review of the issue in consultation with all stakeholders, including the Ministry of Information Technology and Telecom.
In a separate statement issued today, the PTA informed the FBR that ITGO required reconsideration before implementation and disclosed that consultations with stakeholders on the matter had already commenced.
