On Friday, telecom operators agreed to begin manually blocking small batches of non-filers, concluding a week-long standoff regarding the implementation of the tax authorities’ drive to expand the tax base.
This agreement was reached after critical meetings between the Federal Board of Revenue (FBR), the Pakistan Telecommunication Authority (PTA), and telecom operators to enforce Income Tax General Order No. 1, issued under Section 114 B of the Income Tax Ordinance 2001.
On April 30, the FBR published a list of 506,671 individuals who failed to file their tax returns for 2023. As a penalty, their mobile phone SIMs will be blocked. However, telecom providers objected to the decision and delayed its implementation, which was made under an act of parliament.
An official statement from the FBR indicated that after several discussions, telecom operators agreed to start the manual blocking process in small batches until their systems are capable of automating it.
IHC Chief Justice Aamer Farooq heard a petition from the private telecom operator Zong.
During the hearing, the petitioner’s lawyer, Salman Akram Raja, argued that the constitutional amendment made in this regard violated the basic right to freedom of business granted under Article 18.
“There can be no legislation contrary to the fundamental rights given in the Constitution,” he said.
Advocate Raja contended that the government cannot acquire the power to block people’s mobile phone SIMs by amending the law.
He noted that blocking more than 500,000 SIMs would result in an annual loss of Rs1 billion.
The IHC requested a response from the respondents by May 27.
Initially, on May 4, PTA had refused the FBR’s demand to block the mobile phone SIMs, stating that its execution was not within its jurisdiction and therefore the order would have “no legal binding effect” as it was inconsistent with the existing legal framework.
Then on May 7, telecom companies collectively expressed their concerns to the Ministry of IT, stating that the FBR’s decision to block the SIMs of non-filers was made in undue haste and would negatively affect telecom customers.
A letter from the cellular mobile operators (CMOs) stated that they were obligated to provide uninterrupted services to their customers, except in circumstances mentioned in the Telecom Act and applicable regulations. There are no provisions allowing CMOs to disconnect or block a customer’s service.
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