Pakistan blocks 210,000 SIM cards to encourage tax payment

Pakistan's tax authority said on Thursday it has blocked 210,000 SIM cards of users who have not filed tax returns in a bid to widen the revenue bracket.

Only 5.2 million people of the more than 240 million population filed income tax returns in 2022.

The Federal Board of Revenue (FBR) passed the edict in April and has since sent orders to the telecommunications authority to block the connections of 210,000 SIM cards, with 62,000 of them later restored, according to the board's data.

"We have unblocked the SIMs of those who have paid their taxes," FBR public relations official Bakhtiar Muhammad said.

"Nobody voluntarily comes up and pays taxes. We have to make ways for the people to pay their taxes."

Pakistan has more than 192 million cellphone subscribers and four telecommunications service providers, according to the telecommunication authority.

Pakistanis must register a SIM card with their national identity number, which is often used for multiple connections.

"Access to telecom services is a basic human right and essential for many other fundamental services, including access to information, education, and emergency services," an official at one of the four telecommunications companies told reporters on the condition of anonymity.

"We are in dialogue with the authorities, convincing them to use technology to help increase tax collection, as abrupt measures could disrupt the provision of these critical services."

The South Asian country is struggling to increase its pitifully low revenue base but is hampered by a largely undocumented economy.

The government has been pushing for more loans from the International Monetary Fund to help balance its books but the lender wants Islamabad to do more to mobilise its own resources.

"This is an absurd move. Not everyone who has SIMs earns enough to fall under the tax-paying category," Fareiha Aziz, a digital rights activist said.

"People's livelihoods are tied to their phones, this is an overreach."

The four telecommunications companies warned in a letter to the ministry of information technology in June that the new tax measures against non-tax filing cellphone users were "impractical" and "non workable" and would scare away foreign investment.

Tauseef Gilani, a 66-year-old businessman in Islamabad, said the novel move was going too far.

"Whatever income I earn, it's my responsibility to contribute back to society," Gilani said.

"However, blocking SIMs is unjust - it infringes upon freedom of expression and violates rights."

Agence France-Presse