The IHC has decided to halt the FBR’s directive to block over 500,000 SIMs of individuals who did not file their tax returns in 2023. The FBR’s enforcement of tax compliance was met with plenty of resistance from telecom companies to begin with, and combined with the legal and financial costs they would end up creating, the court rightly decided to intervene in this matter.
There is a delicate balance that we need to find between tax enforcement and safeguarding our fundamental rights as citizens. The court is correct because it correctly prioritized constitutional rights over a mere penalty. Tax evaders are undoubtedly a challenge for the current government to tackle, but enforcing compliance through crude and heavy-handed methods is not the way to go about this.
Enforcement has always bred resistance, and given the volatile nature of the nation at the moment, we would be best walking on eggshells for the time being. We have already seen how these tactics are responded to by citizens in the case of Malakand, where traders protested against the imposition of new taxes, and in the end, we lose the economic growth and stability we were fighting for to begin with.
Widening the tax net through simply blocking SIMs should not be the first strategy we implement either. There are far more effective and more importantly, equitable approaches that the government should pursue. The focus should be on killing the big fish here – major tax evaders, property schemes, and large manufacturers – these need to be incorporated into the tax net. Instead of targeting individuals, the government can start from the top here, and set an example of compliance to ensure that all segments of society contribute their fair share – a method that would actual garner public support as well.
Not to mention, blocking the communication method for half a million individuals will wreak havoc financially speaking. Advocate Salman Raja highlighted that blocking this many SIMs would result in a loss of Rs. 1 Billion annually – we cannot simply ignore this loss for a penalty. This is not just about what the telecom industry wants, this will have major ripple effects on the broader economy.
We must adopt a more nuanced and strategic approach to tax enforcement overall – one that balanced our revenue goals with citizens’ rights. Once a fair tax system is set in place, citizens will be happy to climb aboard.