ISLAMABAD: The Federal Board of Revenue (FBR) may take similar enforcement action of blocking SIMs against 1.4 million non-filers, whose names are not appearing in the Active Taxpayers List (ATL).
When contacted, senior tax expert Asif S Kasbati, PBC Core Tax Committee; ICAP Fiscal Laws Committee Member said the FBR has issued an Income Tax General Order - ITGO 1 dated 29 April 2024 to enforce filing of returns who are not appearing in the ATL for Tax Year 2023 to block SIMs of 507,000 not on Income Tax Active Tax List (ATL), however, it is expected the SIMS of more than 893,000 on non-ATL will be blocked, by the issuance of similar ITGOs shortly.
Kasbati predicted that SIMs of over 1.4 million not on ATL could be blocked though the FBR issued the ITGO to disable the mobile phone SIMs in respect of 506,671 persons who are not appearing on ATL but are liable to file the income tax return for tax year 2023 under the provisions of the Income Tax Ordinance.
FBR issues list to PTA: SIMs of 506,671 IT non-filers to be blocked
Kasbati indicated that one or more ITGO may be issued for about 835,000 or more being the difference between ATL for tax year 2023 as of April 30, 2024 at 4,073,068 when compared with taxpayers on tax year 2022 ATL of 5,416,068 on January 1, 2024 and even more thereafter; while only 506,071 CNICs are appearing in the already issued General Order.
Based on Kasbati Co numerical Analysis, he stated that the FBR objectives seems to be to speed up the actions against taxpayers who have filed returns for tax year 2022 but not filed tax year 2023 return.
Hence, Kasbati & Co (KC) Analysis indicated rest of 893,000 or more could be blocked by June 15, 2024 for the old taxpayers and not actually the broadening the tax base objectives. SIMs of 507,000 may be blocked by 15 May 2024. The PTA and all the telecom operators are required to ensure the compliance of the first ITGO with immediate effect. The mobile SIMs in respect of those individuals will remain blocked until restored by the FBR or the Commissioner Inland Revenue having jurisdiction of the person.
He recommended that all entities suppliers and buyers have income tax and sales tax registration; that can be checked from https://e.fbr.gov.pk/esbn/Verification# link in order to avoid later issues. In case of non-availability, immediately contact them and suggest they urgently register for IT and FST. For quick Income Tax; Sales Tax registrations and filing, he suggested 1.4 million to contact their tax adviser urgently.
Regarding broadening the tax base, he earlier predicted for five million taxpayers, which is becoming true and he now predicts to increase to six million by 31 December 2024. However, the FBR can achieve the target of six million taxpayers earlier on the ATL through broadening the tax base process by data mining of withholding taxes, coordination with NADRA, Provincial Revenue Authorities for Properties; Motor Vehicles, bringing maximum Non-Tier 1 traders into tax net, etc.
He recalled that the former FBR adviser, Dr Waqar Masood estimated in December 2020 that there are 7.4 million. In June 2021, former finance minister Shaukat Tarin has indicated 15 million potential non-filers.
The objective was not achieved by any of the past political regimes.
Meanwhile a press release of the FBR stated, in a move to enhance tax compliance and ensure adherence to the provisions of the Income Tax Ordinance, 2001, the Federal Board of Revenue (FBR) has issued an Income Tax General Order (ITGO) in respect of individuals who are not appearing on the active taxpayer list but are obligated to file Income Tax Returns for the Tax Year 2023.
Under the authority vested by section 114B of the Income Tax Ordinance, 2001, FBR has taken decisive action by issuing an order to disable mobile phone SIMs associated with 506,671 individuals who fall under the aforementioned category. These measures are aimed at encouraging individuals to fulfill their tax obligations and contribute to the country’s economic development.
Key points of the Income Tax General Order (ITGO) include:
Disabling Mobile Phone SIMs: The SIM cards linked to the specified individuals’ CNIC will remain blocked until restored by the FBR or the Commissioner Inland Revenue having jurisdiction over the individual.
Immediate Effect: The Pakistan Telecommunication Authority (PTA) and all telecom operators have been instructed to enforce the ITGO with immediate effect, ensuring swift implementation of the order.
Compliance Reporting: Telecom operators are mandated to furnish a compliance report to the FBR by May 15, 2024, to provide transparency and accountability in the enforcement process. This strategic initiative underscores FBR’s commitment to fostering a culture of tax compliance and accountability among taxpayers. Through enforcement measures and collaboration with relevant stakeholders, FBR aims to strengthen the tax base and promote a fair and equitable tax system for the benefit of the nation. FBR encourages all individuals to promptly address their tax obligations and take necessary steps through filing their income tax returns for tax year 2023 by furnishing correct declarations to restore their mobile phone services in compliance with the ITGO, the FBR added.
Copyright Business Recorder, 2024
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