Islamabad: The Cellular Mobile Operators (CMOs) have strongly opposed the Federal Board of Revenue’s decision to block over 0.5 million SIMs, labeling it as a clear violation of the Pakistan Telecommunication (Re-Organization) Act 1996, license conditions, and regulations. They have deemed this action as “illegal” on the part of the tax authorities.
In a collective letter addressed to the Ministry of Information Technology and Pakistan Telecommunication Authority (PTA), along with other relevant stakeholders, the Chief Marketing Officers (CMOs) have taken a firm position against Section 114B of the Income Tax Ordinance and the Income Tax General Order (ITGO) issued by the Federal Board of Revenue (FBR). They argue that these measures are “illegal and ultra vires the Constitution of Pakistan and the Telecom Act.”
The CMOs have expressed their desire to seek support from the regulatory body, PTA, which has been entrusted by the legislature to promote and safeguard the interests of both the users and the CMOs. They have requested the government’s intervention as the custodian of the sector to protect the telecom industry and its customers in this crucial matter.
While the intention behind the ITGO may be to penalize non-compliant individuals and encourage them to pay taxes, the specific measures being implemented have not been thoroughly considered. The FBR has not conducted a legal analysis, ensured the protection of constitutional rights, or conducted a cost-benefit review prior to passing and implementing the ITGO.
Consequently, the rushed implementation of the ITGO will have a negative impact on customers. It will severely hinder their access to essential services, which have been recognized as a right to life in various judgments by superior courts. Furthermore, it will infringe upon the rights of compliant telecom operators and impede their ability to operate. Instead, any individuals found to be non-compliant should be directly sanctioned or penalized, without involving and adversely affecting the telecom industry.
The letter also mentioned that in case telecom operators adhere to the ITGO, affected individuals might take legal action against the CMOs. If the affected individual believes that their SIM card has been blocked hastily, unlawfully, without due process, and that the actions of the telecom operators and the FBR are not in line with the law.
The affected individual could also seek compensation for special costs, damages, and losses incurred due to the blocking of their SIM card. It is deemed unjust, unreasonable, and unacceptable for CMOs to face such risks. On the contrary, CMOs are significant contributors to the country’s revenue collection. Therefore, before implementing such directives, certain protections or indemnities should be provided to CMOs through legal amendments to shield them from adverse consequences or customer actions/claims.
The telecom industry also believes that mass blocking of these SIMs could pose technical challenges, and CMOs would be required to notify such customers multiple times before any blocking is carried out through SMS messages, if mandated by law. They have contractual obligations towards consumers to provide advance statutory notice with valid reasons, which are currently lacking.
In order to comply with this, they need to establish internal processes and system development to meet this requirement, which necessitates a reasonable amount of time and resources. Immediate compliance with the ITGO is challenging. Even if such blocking occurs, CMOs are unaware of any finalized mechanism by the PTA or the FBR for unblocking mobile numbers/SIMs after customers have filed their tax returns following service suspension. Therefore, various procedural aspects related to blocking and restoring mobile SIMs need to be discussed and agreed upon before taking such actions.
- When discussing consumer protection, it is important to consider relevant constitutional provisions of basic human rights. According to Consumer Protection Regulations, operators are required to give prior notice before suspending services. However, in this particular case, issuing a notice is not feasible due to legal issues with ITGO.
The industry emphasizes that every individual has the right to fair treatment and due process under the law. Therefore, those affected by ITGO should be informed through a comprehensive media campaign and given show cause notices to present their case in a tribunal or court.
By following this legal and procedural framework, tax compliance measures can be implemented transparently and fairly, reducing the chances of legal disputes with telecom operators over service blocking or restoration. Additionally, these measures may encourage noncompliant individuals to file their tax returns without facing SIM blockages under ITGO, as stated in the letter.
