PTA, FBR Enter Into Row Over Blocking SIMS
PTA refuses to accept the demand of FBR to shut down around 500,000 SIMs across the country
By Newztodays Team
Pakistan Telecommunication Authority (PTA) and the Federal Board of Revenue (FBR) have entered into a row over shutting down SIMs.
PTA in a statement said that on the issue of blocking mobile phone SIMs under section 114-B of Income Tax Ordinance 2001 – Pakistan Telecommunication Authority (PTA) has communicated to FBR that the income Tax General Order (ITGO) in the manner as referred to the Authority needs review before its execution by the concerned entity(s).
In the meanwhile PTA has also initiated consultation with stakeholders on the subject issue.
Telecom operators have already opposed an initiative of FBR to block SIMs of those who do not pay tax.
The Pakistan Telecommunication Authority (PTA) has declined the demand of the tax-collecting body to shut down around 500,000 SIMs across the country.
The telecom operator has responded to the request made by the Federal Board of Revenue on April 29, seeking to block SIMs of 506,671 individuals who have failed to file their tax returns for the tax year 2023.
After in-camera meetings with stakeholders, including the four telecom companies in the country – Jazz, Ufone, Zong4G, and Telenor, the PTA broke the silence here on Saturday and said that the matter needed to be reviewed.FBR to Block SIMs of 506,671 Individuals for Tax Non-Compliance
Section 114B of the Income Tax Ordinance, 2001 empowers the FBR to issue ITGO to persons who are not appearing on the active taxpayers’ list and disable their mobile phone SIMs as well as discontinue their electricity and gas connections.
Meanwhile, the PTA has also written the official response to the Inland Revenue – Operations, FBR stating that the matter needs to be reviewed in a holistic manner after consultations with all relevant stakeholders including the Ministry of IT & Telecom.
The PTA letter written by the DG Law has referred to the Income Tax General Order (ITGO) issued under section 114-B of the Income Tax Ordinance, 2001, and the telecom operator has stated that the matter does not fall within the jurisdiction of the Pakistan Telecommunication Authority.
“Accordingly, ITGO dated 29th April 2024, referred to PTA for compliance would have no legal binding effect being inconsistent with the applicable legal framework,” the authority replied to the FBR.
The PTA has said that the impact of the execution of ITGO will have an adverse effect on prevailing social norms in many respects as in Pakistan, male members of the society prefer to register SIMs against their CNIC instead of females and juvenile members of the family.
Currently, only 27 percent of SIMs have been registered against the CNIC of females, and in case of blanket blocking of SIMs, potential subscribers could be children and female members of the family using SIMs who may be deprived of communication with specific reference to their educational activities.
The telecom operator has also highlighted that cellular mobile telephony is not merely used for communications or social media activities and it has a wide-ranging impact on the routine life of citizens.
It added that as a result of the blocking of SIMs, multiple issues regarding banking transactions, e-commerce, online business activities, remittance directly into the mobile money accounts, financial support to family members, as well as e-health activities carried out through mobile connectivity, will also emerge.
The PTA has also said that the decision to block more than half a million SIMs will have an adverse impact on the confidence of foreign investment in the telecom sector, including the government’s targets of digital transformation.
The PTA has also said, “It has also been observed that before the execution of the ITGO order, factual issues regarding the usage of SIMs against CNICs also need to be verified on the premise that any person may obtain eight SIMs that include three data and five Voice SIMs; therefore, before implementing ITGO, procedural steps regarding notices would require to be issued by FBR as provided in section 114-B of the Income Tax Ordinance, 2001”.
Finally, the telecom regulator has also warned the tax collecting body that the decision to block SIMs would not yield the desired results and the decision will lead to litigation.
“To avoid any litigious implication, it is also suggested that instead of invoking the penal action in terms of blocking of SIMs at first instance, other alternative modes for ensuring better compliance for filing of income tax returns may be sorted out by carrying out an awareness campaign,” PTA’s response to the FBR said.
The telecom regulator has suggested that other options that can be adopted include sending SMS to the non-filers to give them awareness in this regard.
