The case was heard on a request to vacate the stay order against the action taken by mobile network companies on the government’s decision.

Last week, the IHC issued an injunction on the government’s decision to block the mobile phone SIMs of non-tax filers. The order was issued on an application moved by Zong against the Income Tax General Order No 1 (ITGO-No1), which required all operators to block SIMs of non-filers.

On April 30, the FBR released a list of 506,671 individuals who failed to file their tax returns for 2023. As a penalty, their mobile phone SIMs will be promptly blocked. On Saturday, it was reported that the Federal Board of Revenue constituted an 18-member joint working group with three main telecom operators to continue the manual blockage of non-filers.

At the outset of the hearing on Wednesday, IHC CJ Farooq suggested that it would be better to hear the main petition and decide the matter in one go.

He made it clear that the order of restraint was not on the blocking of SMS. The stay order was only to provide protection to the petitioners, the IHC chief justice said and added that the government’s order to block SMS was still in effect.

IHC CJ Farooq said that the court understands that the government was focusing on economic reforms, and the measure might have been taken in such context. The court would try to decide the case as soon as possible, he added

The court would fix a date in June for the next hearing of the case and the parties could mutually agree on a date and inform the court, he said adjourned the hearing on the petition until June.

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Pakistan has signed an agreement with McKinsey and Company to help Pakistan with end-to-end digitisation of the tax authority, Finance Minister Muhammad Aurangzeb said at a panel discussion on ‘Opening Doors with Fintech’ during the special meeting of the World Economic Forum (WEF) in Riyadh last month.

“It is indeed a big challenge. We have Rs10 trillion cash in circulation in the country at the moment, if you compare it to our annual revenue budget, it’s about Rs9.4 trillion. So almost half of the economy is in that undocumented [informal sector] sector,” Aurangzeb said.