FTO Orders FBR to Create Protocols for Reactivating Blocked Taxpayer SIMs

The Federal Tax Ombudsman (FTO) has instructed the Federal Board of Revenue (FBR) to direct the Member-IR (Operations) to develop a standing operating procedure (SOP) for guiding aggrieved taxpayers on the reactivation of blocked mobile phone SIMs.

In an order issued on Monday, the FTO emphasized that the Chairman of the FBR should seek an explanation from the relevant officer for their failure to attend scheduled hearings.

Key Findings:

During the investigation of various complaints, it was revealed that the FBR has blocked the SIMs of 506,671 taxpayers under Section 114B of the Income Tax Ordinance, 2001, via Income Tax General Order (ITGO) No. 1/2024 dated April 28, 2024, due to inactivity. However, this ITGO does not outline any SOP for reactivating these SIMs, merely stating that they will remain blocked until directed otherwise by the Commissioner or the FBR.

Additionally, in the case of Complaint No. 5785/ISB/IT/2024, a taxpayer’s SIM was blocked despite their inclusion on the Active Taxpayers List (ATL). There have also been reports of SIMs not being reactivated even after taxpayers met the requirements for ATL and filed their tax returns along with the necessary surcharges.

Currently, there is no written SOP regarding the reactivation process for a taxpayer’s SIM once they are recognized as active on the FBR portal. As a result of these findings, the FTO initiated an investigation into the hardships faced by taxpayers due to the blocking of SIMs for being labeled as “Inactive Taxpayers.”

The order noted that neither the Income Tax Ordinance nor the ITGO dated April 29, 2024, provides a procedure for aggrieved taxpayers to request the reactivation of their blocked SIMs. This lack of guidance has been identified as maladministration under Section 2(3)(ii) of the FTO Ordinance, 2000