IHC stays govt’s move to block non-filers’ mobile SIMs
ISLAMABAD: (Suno News) The Islamabad High Court (IHC) on Tuesday issued an injunctive or stay order till May 27 preventing the government from blocking the mobile phone SIMs of those individuals who failed to file their tax returns under the FBR’s Income Tax General Order (ITGO).

 Chief Justice Aamer Farooq presided over the proceedings of a petition filed by a private mobile company through Advocate Salman Akram Raja.

The Federal Board of Revenue (FBR) on April 30 issued the ITGO to block the mobile phone SIMs of 506,671 individuals not so far included in the tax net but are liable to file the Income Tax Returns for Tax Year 2023 under the Income Tax Ordinance.

The decision was issued in the Income Tax General Order (ITGO) no 01 of 2024, which said that the mobile SIMs for these individuals will stay blocked until restored by the FBR or the Commissioner Inland Revenue having authority over the person.

During the proceedings, the counsel argued that the government had made amendment in the law in violation of the fundamental right to freedom of business enshrined in the Article 18 of the Constitution of Islamic Republic of Pakistan.

He informed the court that the mobile companies would suffer a loss of Rs1 billion annually if over 500,000 SIMs were blocked.

The Income Tax General Order (ITGO) is aimed to penalise defiant consumers or to encourage them to enter the tax net. Neither a legal analysis, guaranteed constitutional rights nor a cost-benefit review has been conducted by the FBR ahead of passing and implementing the unconstitutional law.

Earlier, the FBR explored alternative measures such as imposition of a 2.5 per cent additional withholding tax on the mobile phone usage by non-filers as penalty.

The FBR wanted the Pakistan Telecommunication Authority (PTA) and telecom companies block SIMs of non-filers by May 15. The FBR also decided initiate legal proceedings, sources said.

According to the sources, the FBR is also considering to charge from non-filers an additional tax on each mobile and data load.

In a letter addressed to the Ministry of Information Technology and the Pakistan Telecommunication Authority (PTA), the telecom companies had raised legal concerns regarding the implementation of the FBR’s order to block SIMs of non-filers of tax returns. The PTA has already rejected a FBR demand.

The FBR released a comprehensive list of 506,671 individuals who failed to file their tax returns for 2023 demanding their mobile phone SIMs promptly blocked as a penalty.

As per the Active Taxpayers List (ATL), the FBR received 4.2m taxpayers until March 1, 2024 as against 3.8m returns received over the corresponding period of last year. This shows a marginal increase during the period under review.