Section 114B empowers the FBR to impose enforcement measures on eligible non-filers after due legal process.
ISLAMABAD: Taxpayers who fail to file their income tax returns may face a range of enforcement measures under Section 114B of the Income Tax Ordinance, 2001, including the blocking of mobile SIMs, disconnection of utility services and restrictions on foreign travel.
The Federal Board of Revenue (FBR) has been authorised to issue an Income Tax General Order against persons who are legally required to file income tax returns but fail to do so and do not appear on the Active Taxpayers List (ATL).
FBR Empowered to Issue Income Tax General Orders
Section 114B empowers the FBR to initiate enforcement action against non-filers through an Income Tax General Order.
Under the law, the Board may impose one or more of the following restrictions:
• Disable mobile phones or mobile SIMs.
• Discontinue electricity connections.
• Discontinue gas connections.
• Restrict foreign travel for Pakistani citizens.
The measures form part of the government’s efforts to improve tax compliance and encourage eligible persons to file their annual income tax returns.
Exemptions from Foreign Travel Restrictions
The law provides that certain categories of individuals are exempt from restrictions on foreign travel.
These include:
• Holders of a National Identity Card for Overseas Pakistanis (NICOP).
• Minors.
• Students.
• Persons travelling abroad to perform Hajj or Umrah.
• Any other class of persons notified by the FBR.
Conditions Before Enforcement Action
Section 114B also prescribes safeguards that must be fulfilled before a taxpayer can be included in an Income Tax General Order.
The FBR may only proceed after:
1. Issuing a notice under Section 114(4) requiring the taxpayer to file an income tax return.
2. Allowing the prescribed time for compliance to expire.
3. Establishing that the taxpayer has failed to submit the required return.
These conditions ensure that enforcement measures are taken only after the taxpayer has been given an opportunity to comply with the legal requirements.
Restoration of SIMs and Utility Connections
The FBR or the relevant Commissioner of Inland Revenue may order the restoration of mobile SIMs and utility connections where it is satisfied that:
• The taxpayer has subsequently filed the required income tax return; or
• The person was not legally required to file a return under the Income Tax Ordinance, 2001.
Other Legal Action May Still Apply
Section 114B makes it clear that enforcement through an Income Tax General Order does not prevent the FBR from taking any other action available under the Income Tax Ordinance.
Accordingly, non-filers may also be subject to:
• Penalties for non-compliance.
• Default surcharges, where applicable.
• Audit or enforcement proceedings.
• Other legal measures prescribed under Pakistan’s tax laws.
FBR Strengthens Compliance Measures
The provisions of Section 114B form part of the FBR’s broader strategy to expand the tax base and improve documentation of the economy. By linking tax return filing with access to certain public services and overseas travel, the tax authority aims to encourage eligible taxpayers to remain compliant and ensure their inclusion on the Active Taxpayers List.