Cellular Companies Face Heavy Penalties for Failing to Block Non-Filers SIMs

The Federal Board of Revenue (FBR) has introduced strict measures to ensure compliance with income tax regulations. According to the Finance Bill 2024, heavy penalties will be imposed on cellular companies that fail to block non-filers SIMs.

Sources claim that the proposed legislation initially specified a hefty penalty of Rs 100 million for the first default and Rs 200 million for each succeeding default for non-compliance with income tax general orders. However, the amended Finance Bill 2024 has modified these penalties to Rs 50 million for the first default and Rs 100 million for each subsequent default. This modification aims to strike a balance between enforcing compliance and managing the operational burdens on telecom companies.

Penalties Lowered for Telecom Companies Failing to Block Non-Filers SIMs

Tax experts underscore that the FBR is mandated to issue a notification for these penalties. The penalties will only become effective once the FBR officially announces the effective date. This strategy guarantees that telecom companies have a clear timeline and legal framework to stick to.

Furthermore, the Islamabad High Court (IHC) clarified that FBR is barred from taking coercive steps against telecom companies. This discrepancy ensures that while non-compliance is penalized, telecom companies are not subjected to unnecessary pressure or corrective actions beyond the specified penalties.

The proposed penalties will improve the compliance rate among income tax return non-filers. The government hopes to increase revenue and foster broader adherence to tax regulations. Cellular companies should prepare to align their systems and processes to comply with these new regulations. Failure to do so could result in significant financial penalties and operational challenges.

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