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The government has introduced changes to the Finance Bill, requiring the Federal Board of Revenue (FBR) to hold hearings for telecom operators before imposing fines under the Income Tax General Order (ITGO).

According to sources from NetMag, this modification means the FBR will no longer directly fine telecom companies. Instead, it will first call them for a hearing. If the telecom operator fails to convince the FBR that it is complying with the ITGO by blocking SIM cards of non-tax filers, a fine will then be imposed.

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Additionally, the fines for non-compliance have been reduced. Previously, telecom operators faced fines of Rs. 100 million and Rs. 200 million every 15 days for failing to block SIM cards of non-filers. The new fines are Rs. 50 million and Rs. 100 million for the same period. Industry sources suggest that the financial impact of this Finance Bill on the telecom sector is still unclear but potentially significant, as telecom companies may face revenue losses depending on the number of mobile SIM cards affected by the FBR’s ITGO.

Telecom operators had previously appealed to the Finance Ministry, FBR, IT Ministry, and the Special Investment Facilitation Council (SIFC), requesting the abolition of these amendments.

They argued that they are not enforcement agencies and cannot distinguish between compliant and non-compliant tax filers for withholding tax purposes. With over 180 million subscribers, implementing such changes is operationally challenging and impractical.

The Senate Standing Committee on Finance has urged the government to review the fines under the ITGO and engage with telecom operators to address their concerns.

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