The Federal Board of Revenue (FBR) has taken an unprecedented step to boost tax revenues and widen the tax net, imposing a staggering 90 percent withholding tax on mobile recharges for non-filers of income tax returns.
In a move that has sent shockwaves through the telecom industry, the FBR has directed all telecom companies to deduct Rs90 out of every Rs100 mobile recharge made by individuals who have not filed their tax returns. This decision marks a significant increase from the previous withholding tax rate of 2.5 percent.
According to sources within the FBR, persistent non-compliance with tax obligations will result in further penalties. Non-filers will not only face the 90 percent tax on mobile recharges but also on the purchase of new SIM cards and the usage of call and data plans.
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To ensure strict enforcement, the FBR has shared lists identifying over 500,000 non-filers with the Pakistan Telecommunication Authority (PTA) and telecom companies, instructing them to block the SIM cards of these individuals. Already, around 11,500 SIM cards have been blocked, with more expected to follow in the coming days.
Telecom companies have been given a deadline of May 15 to block all SIM cards linked to the identified non-filers. This crackdown comes after the FBR identified millions of potential taxpayers who have not fulfilled their tax responsibilities.
A senior FBR official, speaking on condition of anonymity, stated, “The aim of this measure is to encourage every citizen to contribute to the country’s development by paying their fair share of taxes. Non-compliance will no longer be tolerated, and those who fail to file their tax returns will face severe consequences.”
The move has sparked mixed reactions, with some applauding the government’s efforts to broaden the tax base and others expressing concerns over the potential impact on the telecom industry and consumers.
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