The Pakistan Telecommunication Authority (PTA) has rejected orders from the Federal Board of Revenue (FBR) to block SIM cards of over 500,000 non-filers. The PTA says the tax watchdog’s demand is outside its jurisdiction and would lead to a range of adverse impacts on both users and investors.
Last week, the FBR identified about 506,671 individuals who did not file their income tax returns for the year 2023. The authority ordered the PTA and other telecom operators to immediately block mobile phone SIMs of the defaulters.
The directives, issued under the Income Tax General Order (ITGO), stated that the SIM cards of non-filers would only be restored upon approval from the FBR or the Commissioner Inland Revenue, according to a report by Dawn.com.
The compliance reports by the PTA and other telecom companies were to be submitted by May 15, 2024.
However, on Friday, May 3, the PTA declared that it would not comply with the FBR’s order as it was not applicable under the existing legal framework. The FBR’s demand had no “legal binding effect”, the telecom regulator said.
It stated that before the directives are implemented, it would be necessary to verify information regarding the usage of SIM cards against CNICs (Computerised National Identity Card) given that an individual may acquire up to eight SIMs (five for voice and three for data).
The regulator further noted that the implementation of such directives would demonstrate “an adverse impact on prevailing social norms”. The PTA pointed out that majority of men registered SIMs on their names instead of women and users aged under 18, which indicates that only 27 per cent of SIM cards were registered against the CNICs of women.
Hence, if the FBR’s order is implemented, a large number of women and children would lose access to essential online services, including educational activities. The order’s execution would also erode the confidence of foreign investors in Pakistan’s telecom industry, the PTA added.
In addition, blocking over half a million SIMs would create hindrances in online banking and payments, remittances, and e-health services. The PTA advised the FBR to pursue other alternatives to ensure filing of income tax returns than blocking mobile phone SIMs. It further highlighted the need for the order to be reviewed in stakeholder consultations that would include the Ministry of Information Technology and Telecommunication (MoITT), too.
