FBR expands production monitoring to curb sales tax evasion
Four authorized vendors will support electronic monitoring across packaged tea, household electronics, paper, edible oil and ghee, and leather manufacturing
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Pakistan’s Federal Board of Revenue (FBR) has taken steps to curb sales tax evasion and improve collection in line with targets agreed with the International Monetary Fund (IMF), expanding electronic production monitoring across a range of manufacturing sectors.
Under SRO 1751(I)/2026, FBR has ordered registered manufacturers of leather and paper and paperboard to have their production electronically monitored with immediate effect.
Separately, FBR has authorized four vendors for electronic production monitoring in packaged tea, household electronics, paper and paperboard, edible oil and ghee, and leather manufacturing.
Deployment in each of the five sectors will begin following the issuance of the relevant Sales Tax General Order.
How will FBR’s third-party production monitoring work?
Manufacturers covered by FBR’s electronic monitoring regime must install prescribed monitoring equipment supplied by authorized vendors. The systems allow FBR to monitor production and obtain more accurate output information, helping the tax authority identify under-reporting and improve sales tax compliance across manufacturing sectors brought under the mechanism.
The four authorized companies are Obsidian Technologies, Tollink Pakistan (Pvt.) Ltd., ISSM Labelling Solutions (Private) Limited and Authentik.
Their authorization is valid for three years unless suspended or canceled earlier.
The vendors are authorized to supply, install, operate and maintain production-monitoring equipment at manufacturing facilities covered by the system.
The monitoring mechanism enables FBR to obtain information on actual production and compare it with sales reported for tax purposes, helping identify under-declaration and associated sales tax liabilities.
FBR’s wider production-monitoring framework already covers textile spinning, aerated beverages, bottled water, packaged juices, tiles and packaged milk.
The latest measures are aimed at strengthening production tracking and reducing under-reporting of sales and associated sales tax liabilities.
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