FBR to electronically monitor production of goods in Pakistan

The Federal Board of Revenue (FBR) has mandated electronic monitoring of the production of specified goods in Pakistan.

FBR notified amendments to the Sales Tax Rules of 2006 on Friday that the production of these goods be monitored through video surveillance, ensuring compliance at the production stage.

This initiative involves the installation of production monitoring equipment on production lines, equipped with video analytics solutions and digital surveillance approved by the Board.

The monitoring system will capture real-time footage of the production process, collect data through object detection and object counting, and transmit this data to a Central Control unit at the FBR.

The system will also store and archive data, detect unexpected production stops, perform quantitative analyses of production, and facilitate data analytics for necessary legal actions.

Manufacturers of specified goods are prohibited from removing their products from business premises unless they have undergone the prescribed production monitoring.

According to amendment, vendors will charge manufacturers a fee for the purchase, installation, operation, and maintenance of the monitoring equipment. However, no fees will be charged to any field formations or the Board.

The approval committee, either on its own motion or upon request from a manufacturer, will determine the maximum fee and charges that vendors can collect. These fees and charges will be publicly notified for the information of all relevant parties.

It may be mentioned here that the International Monetary Fund (IMF) has agreed to revise Pakistan’s macroeconomic and fiscal framework for the current financial year.

This revision includes lowering the FBR’s tax collection target by Rs620 billion, from Rs12.97 trillion to Rs12.35 trillion, while maintaining the tax-to-GDP ratio target at 10.6%.

The adjustment follows a revenue shortfall of Rs600 billion recorded in the first eight months of the fiscal year. Consequently, the tax collection targets for the remaining four months will be adjusted downward proportionally to address the shortfall.