ISLAMABAD: The Islamabad High Court (IHC) has stopped the federal government from blocking mobile SIMs of non-filers.

Chief Justice Aamir Farooq made this ruling in response to a petition filed by a telecom operator. The court has also summoned the federal government for further proceedings on May 27, 2024.

The petition contests the legality of Clause 114-B of the Income Tax Ordinance and the Federal Board of Revenue’s (FBR) Income Tax General Orders targeting non-filers.

It argues that these measures infringe upon the fundamental right to conduct business freely, as guaranteed by Article 18 of the Constitution.

The petitioner expressed concerns that if enforced, this legislation could empower the government to deny services across various business sectors.

This development follows an agreement reached between the Federal Board of Revenue (FBR) and telecom operators to block SIM cards of non-filers, with a daily quota of 5,000 SIMs.

The FBR plans to provide additional lists of non-filers on a daily basis, initiating warnings to them about impending SIM blocking. The FBR anticipates that blocking SIMs of non-filers will contribute to increase tax revenue.

Furthermore, the General Order under Income Tax Ordinance 2001, Section 114B, was formulated following discussions between the FBR, PTA, and telecom operators.

These discussions aimed to facilitate SIM blocking of non-filers for the tax year 2023. Previously, Cellular Mobile Companies had refused to block SIM cards of 506,000 identified non-compliant taxpayers citing technical and operational challenges.

Sources indicate that telecom companies have cited legal complexities as a reason for their hesitance in implementing FBR’s directives. It is worth noting that on April 30, the Federal Board of Revenue (FBR) issued an income tax general order instructing authorities to block SIM cards of over 506,000 identified non-compliant taxpayers nationwide.