Citizens Risk Losing Electricity Connection for Failing to File Annual Tax Returns

Citizens Risk Losing Electricity Connection for Failing to File Annual Tax Returns

Karachi, September 21, 2023 – Citizens in Pakistan may face disconnection of their electricity connection for failing to file their annual income tax return for the tax year 2023, according to sources within the Federal Board of Revenue (FBR).

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The FBR has been granted the authority to take strict measures against non-compliance with income tax return filing, which can include the disconnection of electricity, gas, and mobile phone services. These powers are outlined in Section 114B of the Income Tax Ordinance, 2001, which was introduced through the Finance Act of 2022.

Under this section, the FBR can issue an income tax general order for individuals who are not on the active taxpayers’ list but are legally obligated to file a tax return. The income tax general order can lead to the following consequences for the individuals mentioned in it:

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• Disabling of mobile phones or mobile phone SIM cards.

• Discontinuation of electricity connection.

• Discontinuation of gas connection.

However, the FBR or the Commissioner of Inland Revenue with jurisdiction over the individuals mentioned in the general order can order the restoration of mobile phones, SIM cards, and utility connections if they are satisfied that:

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• The tax return has been filed.

• The person was not liable to file a return under the law.

Certain conditions must be met before a person is included in the general order:

• A notice under sub-section (4) of section 114 has been issued.

• The deadline for compliance with the notice has passed.

• The person has not filed the return.

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It’s important to note that the action taken under this section does not preclude other actions provided for under the Income Tax Ordinance. This move aims to encourage tax compliance and increase the number of taxpayers in the country.