Not stopped from blocking SIM cards: FBR only barred from taking coercive steps against telcos: IHC

ISLAMABAD: The Islamabad High Court (IHC) clarified it had not stopped the Federal Board of Revenue (FBR) from blocking the SIMs of non-filers, and it only had barred the authority from taking coercive measures against the telecom operators.

A single bench of Chief Justice Aamer Farooq heard an application moved by the government through Attorney General for Pakistan (AGP) Mansoor Usman Awan, who requested the court to vacate stay against the government’s decision to block the mobile phone SIMs of non-tax filers. In this matter, the IHC bench issued notices to the telecom operator.

Attorney General for Pakistan (AGP) Mansoor Usman Awan appeared before the court to present the government’s case emphasising that notices have been regularly issued to non-filers since November 2023. He argued that the government wanted to have the stay order vacated. The AGP assured the court that individuals with low incomes would not receive notices.

Blocking SIM cards of non-filers: IHC stays govt decision

The IHC chief justice expressed concern over the effectiveness of blocking SIMs as a means of enforcement against tax evasion, questioning its impact on private companies.

At the onset, the AGP said the purpose for appearing before the Court is to get stay order on blocking of mobile phone SIMs dismissed. At that, Justice Aamer stated that the last order was not what it was reported in the media. He said the order did not stay the blockage of SIMs, adding the order was; “no coercive measure shall be taken against the petitioners pursuant to the impugned Income Tax General Order No01/2024.”

The IHC CJ further said that it is feared that the FBR will target everyone so there should be some rules and regulations as not everyone could visit the FBR and give clarification about their status.

The attorney general then submitted that the non-filers would be issued notices from November 2023 and those who have paid their taxes should not be worried. He also said it was obvious that tax filing rules would not apply to low-income individuals. The CJ said of course, ordinary labourers and stall holders will not be included in the tax net while the AGP said they would not even receive FBR notices.

The Chief Justice further asked what would happen if a non-filers children were using a SIM registered under his/her name and what a poor labourer who has not even gotten himself registered would do.

Justice Aamer said the court would issue a notice on his application, adding that the main case is scheduled for hearing on May 27.

The media on May 14 reported that the IHC had issued a stay order on a petition filed by a mobile operator challenging the FBR’s move.

The development came days after the FBR and telecom operators agreed on blocking SIMs of non-filers as part of the government’s bid to curb tax evasion to improve revenue generation amid dire economic indicators.

After lengthy deliberations among the stakeholders, the FBR announced earlier this month that telecom companies have agreed to commence the manual blocking process of SIMs in small batches until their systems are fully equipped to automate it.

The tax collection body had said that the first batch comprising 5,000 non-filers had been communicated to the telecom operators and that more batches would be sent to telcos on a daily basis.

Earlier, it was decided to block 500,000 SIMs of individuals who did not appear on the active taxpayers’ list but were liable to file the income tax return for tax year 2023. The bench, issuing notices to the respondents, sought reply by May 22.

Copyright Business Recorder, 2024