PTA rejects FBR's demand to block over 0.5 million SIMs of non-filers

• SIMs' blockage to create difficulties for women, school children: PTA.
• PTA says "adverse impact likely on foreign investment in telecom sector".
• PTA asks FBR to find alternative modes for income tax compliance.

ISLAMABAD: The Pakistan Telecommunication Authority (PTA) has rejected the Federal Board of Revenue's (FBR) demand to block SIMs of approximately 0.6 million of non-filers, arguing that such order would not have legal bindings and contrary to legal framework. 

Now this rejection might trigger more controversy between the FBR and PTA as both sides are citing different provision of law and legal framework. The FBR might consider the option of prosecuting against those who might prefer to breach their provision of Income Tax General Order (ITGO) under Section 114B, The News reported.

On the other hand, the PTA has sent out an official communication to the FBR and stated that the enforcement of Section 114-B of the Income Tax Ordinance, 2001 and order issued vide No.C.No.6(30)S(CIR-Operation)/2024 dated 29th April, 2024, it is to inform that as per applicable legal regulatory regime, the execution of Income Tax General Order issued under section 114-B of Income Tax Ordinance 2001 does not fall within the jurisdiction of the Pakistan Telecommunication Authority (the "Authority").

Accordingly, ITGO dated April 29th 2024 referred to the Authority for compliance/execution would have no legal binding effect being inconsistent with the applicable legal framework.

In addition, it has also been observed that before the execution of the ITGO order, factual issues with regard to usage of SIMs against Computerised National Identity Cards (CNICs) also need to be verified on the premise that any person may obtain eight SIMs (3 Data and 5 Voice) therefore, before issuing and implementing ITGO, procedural steps with regard to notices would require to be issued by the tax collection authority as provided in section 1I4-B of the Income Tax Ordinance, 2001.

Nevertheless, the impact of the execution of ITGO will also have an adverse impact on prevailing social norms, inter-alia, on the following:

In Pakistan, male members of the society prefer to register SIMs against their CNIC/ names instead of female(s)and juvenile members of family. Currently, as per available information, only 27% of SIMs have been registered against CNIC of females.

Subsequently, potential subscribers i.e., children and female members of family using SIMs may be deprived from communication with specific reference to their educational activities.

It may also have an adverse impact on the confidence of foreign investment in the telecom sector including the objectivity of digital transformation.

As a result of blocking SIMs, multiple issues with regard to banking transactions, e-commerce /online business activities, remittance directly into the mobile money accounts and financial support to family members as well as e-health activities carried out through mobile connectivity will also emerge.

Foregoing in view of the above and as to avoid any litigious implication, it is also suggested that instead of invoking the penal action in terms of blocking SIMs at first instance, other alternative modes for ensuring better compliance for filing of income tax returns may be sorted out by carrying out an awareness campaign, sending SMS etc.

Accordingly, the instant matter needs to be reviewed holistically after consultation with the relevant stakeholders including the Ministry of Information Technology and Telecom. It was also told that this official letter was issued with approval of competent authority, the PTA letter concluded.