Govt to face massive revenue loss over SIMs blockade of non-filers

As the government intensifies its crackdown on tax non-compliance, a looming financial crisis threatens to engulf the treasury, with the impending blockage of 56,000 mobile SIMs casting a shadow over revenue projections.

In a stark warning, renowned tax expert Zeeshan Merchant underscored the dire consequences of the SIM blockade, lamenting the potential loss of a staggering Rs600 million annually in tax revenue.

Merchant highlighted that each mobile phone user contributes an average of Rs280  monthly to government coffers, with the banning of SIMs translating to a loss of Rs100 rupees per user per month, culminating in an annual revenue shortfall of Rs1200 per user.

The gravity of the situation was further exacerbated by the revelation that over half a million individuals had failed to file their 2023 tax returns, prompting the Federal Board of Revenue (FBR) to initiate stringent measures under Income Tax General Order No. 1.

Initially met with resistance from telecom operators, the decision to manually block SIMs gradually gained traction following exhaustive discussions between the FBR, the Pakistan Telecommunication Authority (PTA), and industry stakeholders. Despite this concession, the impending loss of revenue remains a cause for grave concern.

The first wave of enforcement, targeting 5,000 non-filers, has already been set into motion, signaling the beginning of a sweeping campaign to enforce tax compliance. However, the ramifications of this crackdown extend far beyond individual taxpayers, with the broader economy poised to bear the brunt of diminished revenue streams.

The government's fiscal woes have been further compounded by the revelation that over 500,000 potential taxpayers, previously unidentified, are now under scrutiny for their failure to file returns despite reporting taxable income in preceding years.