A contentious proposal by the Federal Board of Revenue (FBR) to block the mobile phone SIMs of tax non-filers has ignited controversy and raised legal challenges after the Pakistan Telecommunication Authority (PTA) rejected the initiative, media reported on Saturday.
The request of the FBR aimed at deactivating the SIM cards of approximately 500,000 non-filers, but it was met with stiff opposition from the PTA, which claimed that such actions would contradict existing legal frameworks and be legally unfounded.
The disagreement could potentially deepen into a significant clash between the FBR and the PTA, as both bodies refer to different legal precedents to justify their positions. According to sources, the FBR is considering legal actions against those who might resist its directive, issued under Section 114B of the Income Tax Ordinance, 2001.
The PTA, in its formal response to the FBR, stated that enforcing Section 114-B and the related order dated April 29, 2024, is beyond its jurisdiction. The telecommunication regulator emphasized that the enforcement proposed by the FBR is inconsistent with the current legal regime, thereby stripping it of any binding legal authority.
Additionally, the PTA expressed several practical concerns regarding the implementation of the ITGO. It highlighted existing discrepancies, such as the necessity to address the factual issues around the allocation of SIMs linked to Computerized National Identity Cards (CNICs). Currently, the system permits individuals to register up to eight SIMs per CNIC, complicating the practicality of the proposed measure.
The PTA also warned of the broader social and economic repercussions that might arise from such a drastic move. It underscored potential disruptions to essential communication services, particularly affecting vulnerable segments of the population such as women and children who rely on mobile connectivity for access to educational resources and other critical services. Additionally, such measures could adversely impact e-commerce, banking transactions, and digital health services.
The authority further indicated that the gender disparity in SIM registration—where only 27% of SIMs are registered to females—could worsen existing societal imbalances if a large number of SIMs were blocked.
In seeking to navigate these challenges, the PTA proposed alternative methods to ensure compliance, such as conducting awareness campaigns and sending SMS notifications to non-filers, rather than resorting to immediate punitive actions like SIM blocking. The PTA recommended that a thorough review be undertaken in consultation with key stakeholders, including the Ministry of Information Technology and Telecom, to devise a balanced approach that avoids potential legal and social pitfalls.
This proposal and its backlash underline the complexities of enforcing tax laws using telecommunications as a lever. It also highlights the need for a coordinated approach that considers the legal, practical, and societal implications of such enforcement measures. As the debate continues, it remains to be seen how the FBR and the PTA will resolve their differences and what strategies will be employed to enhance tax compliance without infringing on citizens’ rights or disrupting essential services.
