The Islamabad High Court (IHC) has temporarily halted the government’s initiative to block mobile phone SIMs of non-filers, issuing a stay order on a private company’s petition until May 27.
During the court proceedings on Tuesday, Salman Akram Raja, representing Zong, argued before IHC Chief Justice Aamer Farooq that the recent amendment to the law contradicted Article 18 of the Constitution, which guarantees freedom of trade, business, or profession.
This decision deals a significant setback to the federal government’s efforts to broaden the tax base, particularly amid concerns raised by the Global System for Mobile Communications Association regarding the proposed measure.
Read: Non-Filer? Here’s How to Check if You Are on FBR’s SIM Block List
Earlier this month, the Federal Board of Revenue (FBR) had mandated all telecom operators to block SIMs of non-filers by May 15, 2024. In the previous month, the FBR directed the Pakistan Telecommunication Authority and telecom operators to block 506,671 mobile phone SIMs belonging to non-filers.
Sources suggest that telecommunication operators have agreed to manually block SIM cards in smaller batches. Instead of imposing penalties on over 570,000 tax evaders, the FBR has opted to levy an additional withholding tax of 90% on them.
Under this arrangement, tax evaders will face a 90% withholding tax until they submit their income tax returns. For instance, if a tax evader reloads a balance of Rs100, the FBR will deduct Rs90 as tax.
Moreover, if these individuals activate another SIM card despite the block, they will be subject to an additional 90% tax on it. Additional taxes will also be imposed on subsequent reloads of SIM cards, as well as on mobile phone and data usage.
