KARACHI: Federal Board of Revenue (FBR) may reintroduce track and trace system for tobacco products by end-June 2021 with a new strategy after a higher court declared the earlier system invalid.
According to country report on Pakistan issued by the International Monetary Fund (IMF) on Thursday, the Pakistan authorities through Letter of Intent (LOI) pledged to reintroduce the track and trace system by end-June 2021.
“The procurement procedures related to the track-and-trace licenses to address the smuggling of tobacco products have been declared invalid by the Islamabad High Court (IHC) and the roll-out of the track-and-trace system for tobacco products was suspended,” according to the report.
Nonetheless, and building on the lessons from this experience, the authorities are seeking to reintroduce and roll out the track-and-trace systems for tobacco products by end-June 2021 and will consider its introduction for other items subject to high levels of smuggling, including sugar, drinks, and cement, it added.
The authorities said that that for tax policy measures to be successful and to generate the expected revenues, we need to step up tax administration reforms and enforcement. To this end, we will focus on:
(i) introducing a centralized, risk-based compliance function;
(ii) modernizing the IT system and further advancing automation;
(iii) actively using third-party data, strengthening data cross-checking, and analysis;
(iv) simplifying registration and filing processes;
(v) modernizing audit practices and taking a more targeted audit approach; and
(vi) further strengthening the large taxpayer approach and expanding the activities of the Large Taxpayer Office (LTO).
Additionally, the authorities will continue the process of sales tax harmonization, implement the single return and taxpayer portal by end-June 2021, and launch a Collectible Debt Campaign by end-March 2021 to redress the high percentage of outstanding debt.
To support GST harmonization, the authorities will establish the single filing portal by September 2024.