THE government has finally implemented its warning to the non-filers vis-à-vis SIM blocking as directions were issued to the Pakistan Telecommunication Authority (PTA) and cellular companies to block mobile phone SIMs of over 500,000 individuals, whose names are not appearing on the active taxpayers’ list. An Income Tax General Order has been issued in this regard and a statement of the Federal Board of Revenue (FBR) says the objective behind the move is to strengthen the tax base and it shows commitment to tax compliance among taxpayers.
The impact of the decision would become clear during the next few weeks when SIMs would be actually blocked and it is to be seen whether this would motivate people to tax compliance. However, in a society where there is no tax culture and different segments of the society have formed pressure groups to continue with tax evasion (as we see in the case of businessmen who are resisting the plan to register themselves as taxpayers with the FBR), it is unlikely that the move would produce any significant results in terms of expansion of tax net until and until penal action is taken against tax evaders and under-filers. There is already a practice of using SIMs in the name of other members of the family or relatives and this is particularly so in the case of women. The move would likely negatively impact revenues of the telecom companies, which are already facing financial crunch due to market situation and intense competition and therefore, the government might be forced to review the decision. However, prudence demands that each and every citizen should cooperate in the national endeavour to mobilize internal revenues to get rid of over-dependence on foreign loans.
