The government plans to extend automated production monitoring across manufacturing sectors to curb tax evasion, with additional equipment procurement deadlines set for October.
ISLAMABAD: Prime Minister Shehbaz Sharif has directed the completion of a production monitoring system for sales tax purposes across all manufacturing sectors by December 31, 2026, as the government intensifies efforts to curb tax evasion and improve revenue collection.
Chairing a review meeting on Federal Board of Revenue (FBR) reforms in Islamabad, the prime minister called for removing obstacles to installing automated monitoring systems and making camera-based production monitoring under the faceless taxation system more effective.
He warned that businesses collecting sales tax from consumers but retaining the money instead of depositing it into the national exchequer did not deserve any concession.
According to a press release issued by the Prime Minister’s Office Media Wing, Shehbaz appreciated manufacturers voluntarily installing production monitoring systems and reiterated the government’s commitment to collecting revenue in line with the country’s full tax potential.
He also commended the FBR Transformation Team for preparing a comprehensive assessment of potential tax revenue from the production sector.
Monitoring system already installed in five sectors
The meeting was informed that the production monitoring system had been fully installed in the sugar, cement, tobacco, tiles and fertiliser sectors.
Installation was under way in the textile, packaged water, packaged juice and packaged milk sectors, with procurement of the required equipment completed, according to the briefing.
Equipment procurement for the steel, poultry and tyre sectors was scheduled for completion by October 15, while procurement for tea, household electronics, leather, paper and board, and oil and ghee sectors was expected to be completed by October 30.
The system is expected to become fully operational across the manufacturing sectors by December 31.
PM directs audits beyond cement sector
Shehbaz also reviewed an audit report on the production monitoring system in the cement sector and directed the Ministry of Information Technology to conduct audits in other sectors to assess the system’s effectiveness.
The meeting was informed of resistance from some businesses to installing monitoring systems in the textile sector. However, several companies had voluntarily complied with the government’s measures.
These included Nishat Mills, Alkaram Textile, Alkaram Cotton Mills, J.K. Spinning Mills, Surti Enterprises, Interloop Limited, Faisal Spinning Mills, Ibrahim Fibres Limited, Sapphire Textiles Limited and Nishat Chunian.
The prime minister appreciated the companies for their cooperation.
Additional tax collection reaches Rs1.3 trillion
The meeting also reviewed the gap between actual tax collection and the country’s estimated revenue potential, including the additional revenue that could be generated through stronger compliance and enforcement.
Officials informed the meeting that government measures had generated an additional Rs1.3 trillion in tax revenue over the past three years, representing a 40% increase in tax collection, according to the official briefing.
Shehbaz praised the FBR Transformation Team for its work in assessing the gap between tax potential and actual collection. He also presented shields to officials involved in preparing the report.
The prime minister said collecting taxes in line with the country’s full revenue potential was an important service to the public. Several federal ministers, the minister of state, the prime minister’s adviser and senior officials attended the meeting.