In a bid to tighten the screw on non-filers, the Federal Board of Revenue (FBR) has decided to block the mobile SIMs of 506,000 non-filers.

The Income Tax General Order has been issued to materialise the initiative. 

As per the order, the FBR has identified those people whose income tax returns have not been filed.  

“Despite being able to pay income tax, they are not filing returns and therefore they are not included in FBR Active Tax Payers List,” the statement added. 

According to the FBR, the mobile phone connections of those who have not filed income tax returns could be closed any time. 

The institution has sought a detailed report from the Pakistan Telecommunication Authority. 

Sources said a list of 500,000 individuals on whom the authorities are zooming in just represents the first phase and has been given a final shape after detailed discussions involving the FBR, the PTA and the mobile phone operators. 

It is reported that the FBR had actually identified two million possible tax evaders, but the mobile phone companies requested that they could not block such a huge number of SIMs in one go.

The current economic crisis is a result of dismal tax-to-GDP ratio in Pakistan – one of the lowest in Pakistan – which is a product of the government failure to expand the tax base, resulting in an alarming increase in indirect taxation and further burdening those who already pay the amount.

 Oil prices fell for a third day on Wednesday amid increasing hopes of a ceasefire agreement in the Middle East and on rising crude inventories and production in the US, the world’s biggest oil consumer.

Both oil price benchmarks were down more than 1 per cent at 10:35 GMT. Brent crude futures for July were $1.15 lower at $85.18 a barrel, while US West Texas Intermediate (WTI) crude futures for June were $1.21 cents lower at $80.72 per barrel.

Expectations that a ceasefire agreement between Israel and Hamas could be in sight, following a renewed push led by Egypt to revive stalled negotiations between the two, pushed oil prices lower.

“The potential for a ceasefire agreement between Israel and Hamas has eased concerns of an escalation of the conflict and any possible disruptions to supply,” ANZ analysts said in a note on Wednesday.

However, Israeli Prime Minister Benjamin Netanyahu vowed on Tuesday to go ahead with a long-promised assault on the southern Gaza city of Rafah, whatever the response by Hamas to the latest proposals for a halt to the fighting and a return of Israeli hostages.

RISING INVENTORIES AND SUPPLY

Also pressuring prices were swelling US crude oil inventories and rising crude supply.

US crude oil inventories rose 4.906 million barrels in the week ended April 26, according to market sources citing American Petroleum Institute figures, which defied expectations for a decline of 1.1 million barrels.

Traders will be waiting to see if official data from the Energy Information Administration (EIA) due at 1430 GMT confirms the build.

US production rose to 13.15 million barrels per day (bpd) in February from 12.58 million bpd in January, its biggest monthly increase in about 3-1/2 years, the EIA said on Tuesday.

“Continued signs of inflation also raised concerns about demand for crude oil. This comes ahead of the US driving season, where demand for gasoline rises strongly,” analysts at ANZ said.

Keeping oil from slipping further, output by the Organization of the Petroleum Exporting Countries (OPEC) was seen falling by 100,000 bpd in April to 26.49 million bpd, a Reuters survey found on Tuesday.

The survey reflected lower exports from Iran, Iraq and Nigeria against a backdrop of ongoing voluntary supply cuts by some members agreed with the wider OPEC+ alliance.

Fiscal deficit in the first nine months of 2023-24 reached Rs4,337 billion, as Pakistan continues to feel the effects of rupee devaluation and the failure to increased tax-to-GDP ratio, which is one of the worst around the globe.

Official figures released by the finance ministry show that the government expenditures had jumped to Rs13,682bn during the July-March period of 2023-24 – the current fiscal year – at a time when overall revenue collection remained at Rs1,682bn.

It again shows Islamabad’s inability to reduce fiscal or budget deficit – a product of small tax net, a plethora of subsidies extended to powerful business interests and absence of economic activities due high interest rates, which could boost revenue generation.

With lucrative sectors like real estate and retail as well as large agriculture landholdings not paying the taxes, the successive governments have always opted for indirect taxation – a practice that always overburden the ordinary people.

Out of the total government income, the Federal Board of Revenue (FBR) contributed Rs6,711bn through tax collection.

As far as the remaining amount is concerned, the non-tax revenue stood at Rs2,517 out of which the share of petroleum development levy (PDL) was Rs719.59 – a record amount in Pakistan’s history despite the reduced consumption of POL products. It represented an increase of Rs247bn when compared to the corresponding period of previous fiscal year.

Obviously, it is result of the government decision to follow the International Monetary Fund (IMF) conditions to increase the PDL on petrol and other petroleum products, thus keeping the fuel prices higher – a policy that is sustaining and fuelling the inflation in the longer run.

Meanwhile, the Centre transferred Rs3,815bn to provinces under the National Finance Commission (NFC) Award – a constitutional mechanism to ensure that the federating units get their rightful share in national resources.

The government expenditures under different important heads are given as: defence Rs1,222bn, pensions Rs611bn, subsidies Rs473bn and development projects [Public Sector Development Programme (PSDP)] Rs270bn.