Finance Minister Shaukat Tarin has said that the prime objective of the government to take the tax-to-GDP ratio to 20 per cent in coming years which currently stood at 8-12 per cent.
The finance minister said this while inaugurating Track & Trace System of Federal Board of Revenue (FBR) a day earlier at Pakistan Tobacco Company Jhelum.
He surmised that currently tax evasion of Rs. 70 billion was being done in tobacco sector which made 37 per cent of market share. He also stated that Economic Advisory Council had been directed to identify more sectors where Track and Trace System could be installed to increase revenue.
This special ceremony was also attended by Chairman FBR Dr. Muhammad Ashfaq Ahmed along with Qaiser Iqbal, Member (IR Operations) and Tariq Sheikh, Project Director (TTS). The CEO of Pakistan Tobacco Company Ali Khan welcomed the Chief Guest and other dignitaries present on the occasion.
In his speech the finance minister congratulated FBR for rolling out this significant project which would help prevent leakage of revenue, under-reporting of production and sales of tobacco products and ensure proper payment of FED and Sales Tax on the manufacture and sale of the products.
“TTS is a very comprehensive and robust electronic monitoring system, which is a paradigm shift from conventional physical monitoring system. It is believed that installation of the Track and Trace System (TTS) in the notified sectors would be a game changer for improving revenue and curbing counterfeit products in the market,” Financed Minister added.
While highlighting the persistent efforts of FBR for rolling out this project, the Finance Minister stated that it was heartening to see that FBR had successfully issued a license and subsequently, signed a contract with AJCL/Mittas/Authentix Consortium for installation of Track and Trace System (TTS) on 5th March, 2021.
This System is to be developed, operated and maintained by the licensee for notified sectors including Tobacco products manufactured in and imported into Pakistan. For this purpose, FBR was striving hard to implement the system for last 12 years, but unfortunately, it resulted in 5 unsuccessful attempts. However, in its sixth attempt, FBR has procured one of the best Track & Trace System (TTS) available after strenuous efforts of over a decade.
Speaking on the occasion, Chairman FBR Dr. Muhammad Ashfaq Ahmed thanked Federal Minister for Finance & Revenue on gracing this important event. While highlighting the features of this project, Chairman FBR stated that Electronic monitoring of common-use products right from the entry-point into the supply chain, that is, production or import till the exit-point, that is, purchase by end-consumer – broadly referred to as Track & Trace System (TTS) – is being viewed as a watershed development in maximizing revenue potential in the notified sectors.
“TTS entails application of Unique Identification Marks (UIMs) or Tax Stamps carrying covert, semi-covert, overt, forensic and digital features enabling electronic traceability of goods across the supply chain,” Chairman added.
Chairman FBR further stated that the UIMs applied on industrial products would help identify, isolate, and curb the production, supply and movement of untaxed, counterfeit and smuggled goods thereby strengthening governance and rule of law in Pakistan. “Presently, TTS is used in over 80 countries to apply about 10 trillion UIMs on various products, across the globe,” he recalled.
He reaffirmed that this system would be further strengthened by vigilant, efficient and fully equipped Inland Revenue Enforcement Network (IREN) and the Federal Government had already allocated Rs.435 Million for purchase of vehicles, state of the art equipment and latest technology driven gadgets for the Enforcement Network.
“The IREN will be able to combat evasion and leakages of taxes and duties payable on notified goods, through the Enforcement Squads that shall patrol the designated routes on which specified goods are moving and check a vehicle or any place of storage, wherein reportedly such specified goods are being transported, stored or kept,” he explained. In addition to tobacco, FBR is also preparing to implement TTS in sugar, Fertilizer and Cement Sectors in the near future.