The Federal Board of Revenue (FBR) issued legally-binding instructions to block mobile phone connections of over half-a-million non-filers, intensifying efforts to boost tax compliance.
This action followed the FBR’s recent campaign to voluntarily register retailers, which saw only 75 retailers availing the scheme. Moreover, the tax collection for the ten-month period fell short of the target by approximately Rs40 billion, posing additional challenges.
The FBR’s directive targets individuals not appearing on the active taxpayer list but liable to file Income Tax Returns for Tax Year 2023. Over 500,000 SIM cards are set to be disabled, affecting approximately 1 million to 1.5 million connections. This measure underscores the FBR’s resolve to enforce tax obligations, as outlined in the Income Tax Ordinance, 2001.
Retailers Registration Scheme Faces Setback
Prime Minister Shehbaz Sharif’s government launched a compulsory tax registration scheme for retailers, aiming to integrate 3.2 million retailers into the tax net. Despite the one-month deadline for voluntary registration, only 75 retailers complied, signaling resistance within the retail sector. The FBR plans legal action against remaining non-compliant retailers, indicating a stringent approach towards tax evasion.
Despite efforts to enhance tax collection, the FBR collected Rs7.38 trillion during the first ten months of the fiscal year, falling short of the target. Income tax collection reached Rs3.52 trillion, while sales tax and custom duties remained weak areas. Meanwhile, the government’s decision to remove 25 FBR officers sparked resentment among customs officers, leading to discussions on potential strike action or mass leave applications.
Read More: Government Slashes Fuel Prices
Amidst tax collection challenges, the government is devising strategies to address tax evasion, including measures targeting sectors like telecom, property, and construction. Plans include digital tax collection and cracking down on retailers nationwide. Additionally, efforts to combat under-invoicing and smuggling aim to bolster tax revenues. These initiatives reflect the government’s determination to enhance tax compliance and revenue generation.