The Islamabad High Court’s (IHC) judgment prohibiting the federal government from blocking the SIM cards of tax non-filers till May 27 was sought to be dismissed by the federal government on Friday.
The appeal was heard by Attorney General for Pakistan (AGP) Mansoor Usman Awan before IHC Chief Justice Aamer Farooq.
On May 12, it was claimed that over 5,000 people received notifications from the FBR informing them that if they failed to file their returns, their SIM cards would be blocked.
On the petition of a private telecom business, the IHC, however, temporarily barred the government from blocking the SIMs two days later.
The events of today
Justice Farooq expressed dissatisfaction during today’s sessions, claiming that the media had not adequately conveyed the prior order.
The AGP stated that detailed information is provided under Section 144, which deals with taxes. It is acknowledged that letters will not be sent to people whose income is exempt from taxes. He went on to say that the National Tax Number (NTN) was also clearly indicated.
Laborers will not be flagged as non-filers, the IHC CJ agreed. But he went on to say that issues come up when the Federal Board of Revenue (FBR) starts going after everyone. “After that, everyone must go present their case. How many will come up to the FBR? The judge said, “You ought to have included some rules for the FBR as well.”
After accepting the government’s appeal, Justice Farooq set a hearing for May 22.
The CJ then inquired, “What would happen if a child of someone who is not subject to taxes uses a SIM card that is registered in their father’s name? If a poor man doesn’t even have a SIM card registered in his name, what would he do?
The AGP did clarify, though, that notices will not be given to those who are less fortunate. He stated that from November 2023, the administration has been sending out these notifications. He said that those who reply to the notice or fulfill the FBR will have their SIM cards reinstated.
FBR arrangement
Just 75 retailers have opted into the FBR’s voluntary registration program, despite the agency’s legally enforceable directive to the relevant departments to block the mobile phone connections of nearly half a million non-filers issued on April 30.
A few days later, though, the Pakistan Telecommunication Authority (PTA) rejected the government’s order, citing legal inconsistencies as the reason for their refusal to carry out the directive.
Rather of concentrating on “awareness campaigns through SMS,” which are a revenue stream for the telecom firms, the FBR was urged by the PTA, the regulator of the telecom industry. The FBR has also been instructed to exercise caution over the “prevailing social norms.”
With its denial, the PTA has launched its first legal challenge against the government and the Special Investment Facilitation Council (SIFC), which was resolute in its efforts to broaden the tax base this year to include at least 6 million taxpayers. Currently, there are over 10 million registered persons, but less than 4.5 million people file income tax reports.
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