FBR cracks down on tax dodgers, blocks more than 200,000 SIMs

ISLAMABAD: In a bold move aimed at boosting tax revenues, Pakistan’s Federal Board of Revenue (FBR) has deactivated 210,000 SIM cards belonging to individuals who have not filed tax returns.

This action, announced Thursday, comes as part of efforts to improve tax compliance in a country where only a fraction of the population—5.2 million out of over 240 million—filed income tax returns last year.

The FBR’s directive, issued in April, led to telecommunications authorities swiftly blocking these SIM cards. However, following interventions and tax payments from some users, 62,000 SIM cards have been reinstated, according to FBR data.

Bakhtiar Muhammad, a spokesperson for the FBR, clarified that those who fulfilled their tax obligations had their SIM cards unblocked. He highlighted the necessity of creating easier avenues for tax compliance rather than relying solely on voluntary contributions.

Pakistan, with over 192 million cellphone users and four major telecom providers, requires SIM card registration linked to a national identity number, often used for multiple connections.

According to Business Recorder, this enforcement has sparked concerns about access to essential services such as information, education, and emergencies. Telecom companies are urging authorities to explore less disruptive ways to collect taxes through technology.

Despite these efforts, Pakistan faces challenges due to its large informal economy, complicating efforts to increase tax revenues. The government’s reliance on loans from the International Monetary Fund (IMF) underscores the need to boost domestic revenue.

Critics, including digital rights activist Fareiha Aziz, argue that the FBR’s move is unfair, as not all SIM card holders earn enough to meet tax thresholds. Aziz highlighted, “Many people rely on mobile connectivity for their livelihoods, and blocking SIM cards could infringe on personal freedoms.”

Meanwhile, telecom companies have cautioned against the practicality of the measures, warning they could deter foreign investment. In a letter to the Ministry of Information Technology, they described the enforcement as “impractical” and advocated for a balanced approach that doesn’t disrupt economic stability.

Read next: Global oil prices decline following surge to multi-month highs