ISLAMABAD: A Pakistani court on Tuesday issued a stay order against a government directive to block cellphone SIMs of users who did not file their tax returns in 2023, as the lawyer of a telecom company argued the decision was taken in violation of the constitution.

Last month, the Federal Board of Revenue (FBR), the country’s tax collection body, ordered the Pakistan Telecommunication Authority (PTA) to block over half a million SIMs belonging to people required to file taxes but who were not appearing on the active taxpayers’ list.

However, telecom companies were reluctant to implement the directives affecting so many subscribers, prompting the PTA to urge the FBR to revisit its directive.

The discussion continued until the telecom companies decided last Friday to initiate a manual process of disabling the SIMs in small batches. It was widely reported in the local media on Tuesday the Islamabad High Court (IHC) had stayed the implementation of the cellphone blockage until May 27.

“Blocking more than 500,000 SIMs will result in a loss of Rs1 billion annually,” Advocate Salman Akram Raja was quoted as saying by Pakistan’s Geo News channel.

Raja, who was representing Zong, told the court the decision taken by the government was in violation to Article 18 of the constitution, which guaranteed freedom of trade, business and profession.

Pakistan has traditionally faced the challenge of convincing people to file tax returns, but the government has now decided to implement stringent measures to address the problem, particularly in the context of negotiations for a new International Monetary Fund (IMF) loan program.

The IMF has urged Pakistan in the past to enhance revenue collection from non-filers as part of broader economic reforms to support social and development initiatives.

In response, the FBR is taking steps like blocking the SIM cards and considering other punitive measures to enforce tax compliance and widen the tax net.