Non-filers to face SIM blockage and utility disconnection.
In a move to bolster Pakistan’s tax infrastructure and meet the terms of a $3 billion bailout agreement with the International Monetary Fund (IMF), the Federal Board of Revenue (FBR) has been granted enhanced powers.
This includes the authority to disconnect utility services and block mobile SIM cards for individuals failing to file tax returns in response to issued notices, as reported by The News on Saturday.
Despite a population of 240 million, a mere 4.9 million individuals filed tax returns in the previous financial year, with two million reporting nil returns.
Recognizing the potential for widening the tax net, the FBR has implemented significant restructuring measures, establishing 145 district tax offices (DTOs) nationwide.
The goal is to bring 1.5 to 2 million new taxpayers into the system by June 2024.
These DTOs, staffed by Inland Revenue Officers, are tasked with actively pursuing income tax returns from non-filers and curbing tax evasion.
Prime Minister Anwaar-ul-Haq Kakar underscored the importance of revenue generation and expanding the pool of tax filers during recent high-level meetings, according to a statement issued by the FBR.
To identify potential tax evaders, the FBR will leverage third-party data acquired from various departments, targeting individuals who have thus far eluded the taxation system.
Section 114B in the Income Tax Ordinance 2001 will be invoked as a tool, enabling the FBR to disconnect utility services, including electricity and gas, and block mobile SIM cards if individuals fail to file tax returns in response to issued notices.
In addition to these measures, a new documentation law is set to be introduced, obligating various agencies and departments to provide data to the FBR through an automated common transmission system.
As Non-filers to face SIM blockage and utility disconnection, the overarching objective is to elevate the tax-to-GDP ratio to the desired level, a pursuit underscored by the FBR’s notification of the 145 DTOs on Friday as part of its strategy to broaden the tax base.
