In a move to bolster tax revenues and expand the tax base, the Federal Board of Revenue (FBR) has put forth an interesting proposal targeting non-filers. FBR proposes charging non-filers on mobile recharge transactions, with a whopping 90 percent of their recharge amount deducted and remitted to the tax authority.
FBR Proposes Charging Non-Filers: A Shift in Taxation
Under the proposed initiative, the FBR intends to significantly increase withholding tax rates for non-compliant individuals, escalating it from a mere 2.5 percent to a striking 90 percent. The FBR has recently unleashed lists identifying over 500,000 non-filers, instructing the Pakistan Telecommunication Authority (PTA) and telecom companies to initiate the blocking of their SIM cards.
Telecom corporations are facing mounting pressure as they race against time to comply with the FBR’s directives, with the looming deadline of May 15 for blocking SIM cards belonging to all identified non-filers. The initiative comes on the heels of the FBR’s identification of millions of potential taxpayers who have fallen short of their tax obligations, with over half a million individuals earmarked for SIM card blockade based on various criteria including previous income declarations and non-filing for the tax year 2023.
Telecom Giants Under Pressure
Despite initial resistance from telecom companies citing regulatory constraints, they appear to have relented following discussions with the FBR. With the impending rollout of the proposed tax regime, the FBR aims to instill fiscal discipline while incentivizing tax compliance among a broader spectrum of individuals, thereby improving the nation’s economic framework for sustained growth and development.
Read more: FBR Set to Block Non-Filer SIMs by May 15 Deadline
