FBR to Hear Telcos’ Case Before Imposing Fine For Not Blocking Non-Filer SIMs

The government has introduced changes in the Finance Bill, requiring the Federal Board of Revenue (FBR) to conduct hearings for telecom operators before punishing them with fines under the Income Tax General Order (ITGO). Sources told ProPakistani this modification means that FBR will not directly fine telecom companies but will first call them for a hearing. If the telecom operator fails to satisfy the FBR that it is complying with the ITGO by blocking SIMs of non-tax filers, a fine will be imposed. Also, the fines for non-compliance have been reduced. Previously, telecom operators faced fines of Rs. 100 million and Rs. 200 million every 15 days for failing to block non-filers SIMs. The new amounts are Rs. 50 million and Rs. 100 million for the same period. Industry sources said the financial impact of this Finance Bill on the telecom sector is still unclear but potentially significant, as telecom companies may face revenue losses depending on the number of mobile SIMs affected by FBR’s ITGO. Telecom operators had previously written to the Finance Ministry, FBR, IT Ministry, and the Special Investment Facilitation Council (SIFC), requesting the abolition of these amendments. They argued that they are not enforcement agencies and cannot distinguish between compliant and non-compliant tax filers for withholding tax purposes. With over 180 million subscribers, implementing such changes is operationally challenging and impractical. The Senate Standing Committee on Finance has urged the government to review the fines under the ITGO and engage with telecom operators to address their concerns.