Telecom sector terms FBR move to block non-filers’ SIMs ‘illegal’

Declaring the Federal Board of Revenue’s (FBR) move to block over 0.5 million SIMs as a sheer violation of Pakistan Telecommunication (Re-Organisation) Act 1996, license conditions and regulations, all Cellular Mobile Operators (CMOs) have sternly opposed and termed it as “illegal” move on part of the tax machinery.

In a joint letter written to the Ministry of Information Technology and Pakistan Telecommunication Authority (PTA) as well as other relevant stakeholders, the CMOs took a stance that the Section 114B of Income Tax Ordinance and Income Tax General Order (ITGO) issued by the FBR was “illegal and ultra vires the Constitution of Pakistan and the Telecom Act,” reported The News on Monday.

“We would like to seek support of the regulator PTA being entrusted by the legislatures to promote and protect the interests of the users as well as the CMOs,” the joint letter stated and added that they would therefore request the government for an intervention as custodian of the sector to safeguard the interest of the of the telecom industry as well as its customers on this very important matter.

Whilst the intention of the ITGO may be to penalise non-compliant individuals or to coerce or encourage them to come within the tax net the specific measure being adopted has not been properly thought through; neither a legal analysis, guaranteed constitutional rights, or a cost-benefit review has been undertaken by FBR prior to passing and implementing ITGO, the letter stated.

As such, this ITGO being forced through with undue haste, will adversely impact the customers. “This will gravely impact the customers’ ability to get essential services which have now been defined as right to life under different judgements of superior courts,” it added.

It further said that the move is also detrimental to telecom operators’ rights and their ability to operate, who are fully compliant with their respective tax obligations.

“Any delinquent individuals should rather be sanctioned/penalised in a direct manner without involving and adversely impacting the telecom industry.”

The letter further said that if telecom operators comply with the ITGO, the affected individuals may initiate litigation against the CMOs. If the affected individual is of the view that their SIM card has been blocked in haste, illegally, without due process and the actions of the telecom operators and FBR are not in accordance with law.

“The affected individual may even seek to recover special costs, damages & losses that he/she has incurred because of its SIM card being blocked. With respect, it is unjust, unreasonable, and unacceptable for CMOs to be exposed to such a risk. On the contrary, CMOs are some of the biggest contributors to the revenue collection in the country. Therefore, before implementing such orders, certain protections or indemnities must be given to CMOs through amendment in law to save from adverse consequences or actions/claims from customers.”

The telecom industry also believes that the bulk blocking of these SIMs would be an issue technically and CMOs would need to warn such customers multiple times before execution of any blocking through SMS messages, if required by law, as they have contractual obligations towards their consumers to provide advance statutory notice with valid reasons, which in this case are absent, the letter read.

In this regard, they have to develop internal processes and system development to cater for such requirement, which require reasonable time and resources, hence, immediate compliance of such ITGO is difficult.

Even if such blocking is executed, CMOs are not aware of any mechanism finalised by PTA or FBR regarding the unblocking of the mobile numbers/SIMs after the said customer has filed his/her tax returns consequent to suspension of services. Therefore, many such procedural elements relating to blocking and restoration of Mobile SIMs need to be deliberated and agreed upon before taking such actions, the CMOs said.

When referring to the most important aspect of consumer protection read with relevant constitutional provisions of basic human rights, Consumer Protection Regulations mandated operators that any suspension of service is subject to prior notice of such intentions. In instant case the issuance of notice is not possible because of the legal defects of ITGO, as per the letter.

The industry also suggested that every individual is entitled to fair and equitable treatment with due process in accordance with the law. Therefore, individuals affected by the ITGO should be duly informed through an extensive media campaign and provided with show cause notices, affording them the opportunity to present their case in a tribunal or court of law.

By adhering to this legal and procedural framework, the enforcement of tax compliance measures can be conducted in a transparent and equitable manner, thereby reducing the likelihood of legal disputes against telecom operators regarding the blocking or restoration of services. Moreover, such measures may also encourage noncompliant individuals to file their tax returns without risking significant loss to the FBR through direct SIM blockages under the ITGO, the letter concluded.