FTO Orders FBR to Issue SOPs for Reactivating Blocked SIMs of Taxpayers – Relief on the Way for Non-Filers!

The Federal Tax Ombudsman (FTO) has instructed the Federal Board of Revenue (FBR) to direct Member-IR (Operations) to create a Standard Operating Procedure (SOP) to help non-filers reactivate their blocked mobile phone SIMs.

According to an order issued by the FTO on Monday, FBR’s Chairman should also seek an explanation from the responsible officer for missing scheduled hearings.

During investigations, it was found that FBR recently blocked the SIMs of 506,671 taxpayers under section 114B of the Income Tax Ordinance, 2001, through Income Tax General Order (ITGO) No. 1/2024, labeling them as inactive taxpayers. However, the ITGO lacks any guidance on how to reactivate these SIMs, stating only that the SIMs will remain blocked until approved by a Commissioner or FBR.

In one case (Complaint No. 5785/ISB/IT/2024), a taxpayer’s SIM was blocked despite being listed as active. In other cases, taxpayers who met requirements to appear on the Active Taxpayers’ List (ATL) and paid the associated surcharge still faced issues with reactivation.

Currently, no written SOP exists to clarify how a taxpayer's SIM will be reactivated once they become active on the FBR portal. This gap led to a separate investigation into FBR’s practice of blocking SIMs for inactive taxpayers, which has created significant challenges for affected individuals.

The FTO noted that neither the law nor the ITGO from April 29, 2024, specifies the process for reactivating SIMs. It only indicates that reactivation depends on approval from a Commissioner IR or FBR.

The absence of a clear SOP creates inconsistencies and procedural gaps, which the FTO deems maladministration under section 2(3)(ii) of the FTO Ordinance, 2000.

The IR (Operations Wing) was notified twice for hearings, yet failed to attend, displaying neglect in handling responsibilities. This lack of response is also considered maladministration according to the FTO Ordinance, the FTO order stated.