FEDERAL Board of Revenue (FBR) has reportedly decided to block hundreds of thousands of SIMs belonging to non-filers and under-filers. Undoubtedly, action against tax evaders is crucial for a fair and sustainable tax system. However, the proposed measure of blocking SIMs raises significant concerns that must be addressed.
While it is essential to ensure that all eligible citizens contribute their fair share to the national exchequer, blocking SIMs may not be the most effective approach. There are several reasons why this measure is problematic. Firstly, there are segments of the population, such as pensioners, particularly widows, whose income is not taxable despite receiving a substantial pension. Many of them may lack the knowledge to file tax returns. Punishing such individuals by blocking their SIMs could lead to unintended consequences, depriving them of essential communication services. Moreover, the process of identifying non-filers and under-filers itself may not be foolproof. There could be instances of individuals who are inadvertently categorized as tax evaders due to administrative errors or misunderstandings. Additionally, the telecommunication companies have voiced concerns about the practicality and economic impact of blocking such a large number of SIMs. Instead of solely relying on punitive measures like blocking SIMs, a more holistic approach to tax enforcement is needed. It is important to streamline the tax filing process to make it more accessible and user-friendly, particularly for individuals with limited financial literacy. Simplified forms and online platforms with step-by-step guidance can encourage compliance. The focus should be on identifying high-risk sectors and individuals with significant potential tax liabilities. Utilizing data analytics and risk profiling can help in accurately identifying tax evaders. Offering incentives such as tax credits or deductions for timely filing of tax returns and voluntary disclosure of income can encourage compliance more effectively. Positive reinforcement can play a significant role in fostering a culture of tax compliance.
