Blockage of 500,000 inactive taxpayers’ SIM cards by FBR without a clear Reactivation Process constitutes Maladministration --- Federal Tax Ombudsman
Islamabad 06-11-2024: The Federal Tax Ombudsman (FTO) has issued a significant ruling in response to numerous taxpayer complaints about the Federal Board of Revenue’s (FBR) decision to block the SIM cards of over 500,000 inactive taxpayers. The ruling highlights procedural shortcomings in FBR’s actions, asserting that the lack of a documented Standard Operating Procedure (SOP) for reactivating SIMs once a taxpayer returns to active status constitutes maladministration.
The Federal Tax Ombudsman (FTO) initiated an own-motion investigation after taxpayers reported that their SIMs were blocked despite appearing on the Active Taxpayers’ List (ATL). FBR’s decision to block the SIMs under Section 114B of the Income Tax Ordinance, 2001 was detailed in Income Tax General Order (ITGO) No. 1/2024. However, no SOP was provided for the reactivation of SIMs, leaving many taxpayers in a bureaucratic limbo.
In its ruling, the Federal Tax Ombudsman (FTO) confirmed its jurisdiction to conduct investigations on its own motion, relying on Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000. Citing various legal precedents, including [Writ Petition No. 2322 of 2021] and [CP No. 4079/2021] from the Sindh High Court, the Federal Tax Ombudsman (FTO) emphasized that it has the authority to investigate cases of maladministration without requiring a formal complaint.
The judgement identified a lack of coordination among the FBR, Ministry of IT, and telecom companies regarding SIM reactivation. Although FBR indicated that a reactivation process was coordinated with telecom providers, there was no transparent procedure available to taxpayers. This gap, the Federal Tax Ombudsman (FTO) ruled, constitutes maladministration under Section 2(3)(ii) of the Federal Tax Ombudsman (FTO) Ordinance, 2000.
Additionally, the Federal Tax Ombudsman (FTO) found procedural violations in FBR’s handling of the issue, noting that key officials failed to respond to hearing notices. This non-compliance with investigatory procedures further illustrated FBR’s inefficiency in handling the matter.
In response to these findings, the Federal Tax Ombudsman (FTO) issued the following directives:
- Development of SOP: The FBR is instructed to create a clear SOP for the reactivation of blocked SIMs, which will guide taxpayers on the reactivation process after they have complied with filing requirements.
- Disciplinary Action: The Chairman of FBR is directed to seek an explanation from officials who failed to attend the hearings as required.
- Compliance Report: The FBR is required to report on its compliance with these recommendations within 60 days.
This judgement underscores the Federal Tax Ombudsman (FTO) role in addressing taxpayer grievances against procedural deficiencies in tax administration. The ruling also serves as a reminder of the FBR’s obligation to maintain clear, transparent processes, particularly in areas affecting essential services like telecommunications.
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