Islamabad, June 12, 2024 – The Federal Board of Revenue (FBR) has announced stringent penalties on Cellular Mobile Operators (CMOs) for refusing to block SIM cards of non-filers, as part of the newly introduced amendments in the Finance Bill, 2024.
These measures are aimed at ensuring compliance with tax regulations and increasing the pressure on individuals who fail to file their income tax returns.
Under current regulations, individuals who do not file their tax returns, even after receiving notices, face the blocking of their SIM cards and the disconnection of utility services. This step is part of the broader strategy to compel non-filers to comply with tax laws and submit their returns.
New Measures and Penalties
The FBR has now proposed additional measures to strengthen the enforcement of these regulations:
Travel Restrictions: The Finance Bill 2024 introduces a proposal to bar non-filers from exiting Pakistan, with certain exceptions such as Hajj and Umrah travelers, minors, students, overseas Pakistanis, and other categories as notified by the Board.
Heavy Penalties on CMOs: In cases where CMOs fail to block SIM cards or disconnect utility services of non-filers, or if they do not comply with travel bans, substantial penalties will be imposed:
First Default: A penalty of Rs 100 million will be levied on the implementing agency.
Subsequent Defaults: For each subsequent failure, the penalty will increase to Rs 200 million.
Additional Enforcement Measures
The Finance Bill also includes several other enforcement measures to ensure compliance:
Penalties and Prosecutions: Entities that fail to fully disclose relevant particulars, submit incomplete information, or do not file returns after discontinuing their business will face penalties and potential prosecutions.
Shopkeeper and Trader Compliance: A penalty involving the sealing of shops is proposed for traders and shopkeepers who fail to register under schemes like the Tajir Dost Scheme. Moreover, failure to register by a shopkeeper or trader is proposed to be made an offence punishable by six months of imprisonment, a fine, or both.
Objective and Impact
These measures are designed to enhance the effectiveness of the tax system and ensure that all individuals and entities comply with the filing requirements. The heavy penalties on CMOs aim to eliminate any leniency in enforcing SIM card blocking, thereby increasing the pressure on non-filers to comply with tax laws.
The FBR’s introduction of severe penalties for CMOs and additional enforcement measures reflects the government’s commitment to strengthening tax compliance and broadening the tax base. As these measures come into effect, individuals and entities will need to adhere strictly to the tax regulations to avoid significant penalties and legal repercussions.
