Updated Federal Excise Act requires manufacturers to use tax stamps and digital tracking before goods enter the market
ISLAMABAD: The Federal Board of Revenue (FBR) has made it mandatory for manufacturers to affix tax stamps and other prescribed tracking features on excisable goods before they are removed from factories or offered for sale, under the updated Federal Excise Act, 2005, revised up to June 30, 2026.
The revised law strengthens the FBR’s authority to monitor the production, clearance and sale of excisable goods through electronic tracking and digital verification systems, as the government seeks to improve tax compliance and curb revenue leakage.
FBR empowered to introduce digital monitoring
Under the amended provisions, the FBR may, through a notification published in the official Gazette, specify any registered person, class of registered persons, or category of goods and services that will be subject to monitoring or tracking by electronic or other prescribed means.
The law provides that, from a date to be notified by the Board, no excisable goods may be removed from a manufacturing facility or sold unless they carry the prescribed tax stamp or approved tracking mechanism.
The measure is designed to ensure that products subject to Federal Excise Duty (FED) are properly documented and traceable throughout the supply chain.
Multiple tracking technologies allowed
The updated legislation allows the FBR to prescribe various monitoring technologies, including:
Tax stamps
Banderols
Stickers
Labels
Barcodes
Production monitoring systems
Video analytics
Other electronic or digital tracking technologies specified by the Board
Officials said the flexible framework enables the tax authority to adopt modern technologies to improve oversight of excisable goods.
Manufacturers to obtain stamps from authorised suppliers
The law also requires registered manufacturers to obtain tax stamps and tracking devices only from licensed suppliers authorised by the FBR.
This requirement is intended to standardise the implementation of the track-and-trace system and prevent the use of counterfeit or unauthorised tax stamps.
Manufacturers covered under the notified categories will be responsible for ensuring compliance before excisable goods are cleared for distribution or sale.
Part of broader tax reforms
The mandatory tax stamp regime forms part of the FBR’s broader tax administration reforms aimed at enhancing transparency, improving documentation and strengthening enforcement of federal excise laws.
In recent years, the tax authority has expanded the use of digital monitoring systems and track-and-trace technology across multiple sectors to combat tax evasion, facilitate real-time monitoring of production and sales, and increase revenue collection.
The updated provisions are expected to improve compliance by ensuring excisable goods are electronically tracked before entering the market, reducing opportunities for underreporting and illicit trade.