FBR blocks 210,000 SIMs of non-filers

Pakistan's tax authority announced on Thursday that it has blocked 210,000 SIM cards belonging to users who have not filed tax returns, as part of efforts to broaden the tax base in the country.

In 2022, only 5.2 million out of Pakistan's population of over 240 million filed income tax returns, highlighting a significant gap in tax compliance.

The Federal Board of Revenue (FBR) issued the directive in April, instructing the telecommunications authority to block 210,000 SIM cards. Subsequently, 62,000 of these connections were restored after individuals settled their tax obligations, according to FBR data.

"We have unblocked the SIMs of those who have paid their taxes," stated Bakhtiar Muhammad, a public relations official at FBR. "Nobody voluntarily comes up and pays taxes. We have to create avenues to facilitate tax payment."

Pakistan boasts more than 192 million mobile subscribers served by four telecommunications providers, each requiring registration of SIM cards with a national identity number, often used for multiple connections.

Recognizing the importance of telecom services as a basic human right essential for accessing information, education, and emergency services, an official from one of the telecom companies expressed concerns about abrupt measures impacting these critical services. Discussions are ongoing with authorities to leverage technology for enhancing tax collection without disrupting essential services.

Pakistan faces challenges in expanding its low revenue base, hindered by a predominantly informal economy. Despite efforts to secure additional loans from the International Monetary Fund (IMF) to stabilize finances, Islamabad is under pressure to boost domestic resource mobilization according to IMF requirements.