Islamabad, November 3, 2024 – The Federal Tax Ombudsman (FTO) has formally directed the Federal Board of Revenue (FBR) to establish a standardized operating procedure (SOP) for taxpayers affected by blocked mobile phone SIMs, ensuring clear guidelines for their reactivation.
In a proactive move, the FTO launched an investigation after discovering that the FBR had recently blocked SIMs for over 506,671 individuals. This action, carried out under Section 114B of the Income Tax Ordinance, 2001, was enforced through Income Tax General Order (ITGO) No. 1/2024, issued on April 29, 2024. The order mandates the blocking of SIMs for taxpayers who do not appear on the Active Taxpayers List (ATL), ostensibly as a measure to enforce compliance with tax filing requirements. However, the order does not specify a procedure for reactivating the SIMs of individuals who regain active taxpayer status.
Upon investigating complaints from affected taxpayers, the FTO found multiple instances of blocked SIMs despite compliance with ATL requirements. Several taxpayers reported that their SIMs remained inactive even after filing returns and paying the necessary surcharge for ATL listing. This lack of a clear reactivation process has placed a burden on taxpayers and created operational ambiguity. The absence of an SOP to guide taxpayers on restoring blocked SIMs has amplified frustrations among individuals who have adhered to FBR’s tax compliance requirements.
Following these complaints, the FTO initiated an investigation into the FBR’s processes, particularly scrutinizing the effectiveness and transparency of the measures associated with SIM blocking. The FTO issued hearing notices to FBR representatives; however, the Member IR Operations did not participate in the investigation. Instead, FBR responded with a written statement, arguing that the FTO’s intervention over blocked SIMs extended beyond its jurisdiction. According to FBR, the SIMs were blocked following a vetting process with chief commissioners, who identified these taxpayers as non-filers. Furthermore, the FBR clarified that notices had been sent to taxpayers, urging them to file their income tax returns. Individuals who failed to comply with these notices were subsequently included in the ITGO list, resulting in the blocking of their SIMs.
FBR’s response also emphasized that responsibility for SIM reactivation rests primarily with the Ministry of Information Technology (IT) and the Pakistan Telecom Authority (PTA). Before implementing the ITGO, the FBR engaged in discussions with the Ministry of IT, PTA, and telecom operators to develop a mechanism for reactivating blocked SIMs. However, while the FBR indicated that delays in reactivation are generally minimal, it acknowledged that specific cases might encounter delays.
After reviewing FBR’s written response, the FTO observed that, despite its collaboration with the Ministry of IT, the FBR has not outlined a defined SOP for reactivation requests. Instead, the ITGO only specifies that blocked SIMs remain inactive until reactivation is authorized by either the Commissioner IR or the FBR. This lack of procedural clarity, the FTO noted, constitutes maladministration, as it fails to address taxpayers’ concerns adequately and transparently.
In response, the FTO has urged the FBR to establish and implement an SOP to streamline the reactivation of blocked SIMs. This SOP should clarify the steps required for affected individuals to regain SIM functionality, ensuring that compliant taxpayers are not unduly penalized. By establishing a transparent and efficient reactivation process, the FBR can address taxpayer grievances more effectively and prevent further complications arising from procedural ambiguity.
The FTO’s directive aims to ensure that the FBR adopts a structured approach to handling blocked SIMs, mitigating the operational inconsistencies that have affected taxpayers. With a formalized SOP in place, taxpayers will benefit from a more straightforward process, reducing the administrative burdens and delays they currently experience.
