The Islamabad High Court (IHC) Tuesday issued an injunction on the government’s decision to block the mobile phone SIMs of non-tax filers, reported 24NewsHd TV channel.
IHC Chief Justice Aamer Farooq heard the petition of private telecom operator Zong.
During the hearing, the petitioner’s lawyer Salman Akram Raja argued that the Constitutional amendment done in this regard was in violation of the basic right of freedom of business granted in Article 18.
“There can be no legislation contrary to the fundamental rights given in the Constitution,” he said.
The government cannot get the power to block people’s mobile phone SIMs by amending the law, Advocate Raja contested.
He noted that if more than 500,000 SIMs were blocked, there will be a loss of Rs1 billion annually.
The IHC sought a response from respondents by May 27.
Telecom operators agreed on Friday to initiate the manual blocking process in small batches of non-filers, ending the week-long standoff over the implementation of the tax machinery drive to broaden the tax base.
The understanding was reached after the Federal Board of Revenue (FBR) held crucial meetings with the Pakistan Telecommunication Authority (PTA) and telecom operators to implement Income Tax General Order No. 1, issued under Section 114 B of the Income Tax Ordinance 2001.
On April 30, the FBR released a comprehensive list of 506,671 individuals who failed to file their tax returns for 2023. As a penalty, their mobile phone SIMs will be promptly blocked. However, telecom providers objected to the decision and delayed its execution, which was made under an act of parliament.
An official announcement issued by the FBR said that after several deliberations, the telecom operators have agreed to initiate the manual blocking process in small batches until their systems are fully equipped to automate it.
Initially on May 4, PTA had refused the FBR’s demand to block the mobile phone SIMs, saying its execution did not fall within its jurisdiction and thus the order would have “no legal binding effect” since it was inconsistent with the applicable legal framework.
Earlier on May 7, the telecom industry penned a letter to the Ministry of IT & Telecom and the Pakistan Telecommunication Authority (PTA) stating that they are mandated to provide uninterrupted services to their customers, except in circumstances specified in the Telecom Act and relevant regulations.
While the intention of the Income Tax General Order (ITGO) may be to penalise non-compliant individuals or to encourage them to enter the tax net, the specific measure being adopted lacks proper consideration. Neither a legal analysis, guaranteed constitutional rights nor a cost-benefit review has been conducted by the Federal Board of Revenue (FBR) prior to passing and implementing the ITGO.
The industry further noted in the letter that rushing through this ITGO will adversely affect customers, impacting their ability to access essential services, now recognised as a right to life under various judgments of superior courts. It also undermines the rights and operational capacity of telecom operators who are fully compliant with tax obligations. Any delinquent individuals should instead be directly sanctioned without implicating and adversely affecting the telecom industry.