Pakistan mandates electronic monitoring for bottled water industry

Pakistan’s tax authorities have made electronic production monitoring mandatory for all bottled water manufacturers, expanding the Federal Board of Revenue’s track-and-trace regime to improve tax compliance and enable real-time production oversight.

In a directive issued May 15, the FBR ordered all registered bottled water producers and toll manufacturers to install an electronic production monitoring system “with immediate effect” under Section 40C of the Sales Tax Act, 1990, and related provisions of the Sales Tax Rules, 2006.

The move requires companies to complete installation of the system by June 15, 2026, according to a notification issued by the Inland Revenue Operations Wing of the FBR.

The system will include industrial barcode scanners, counting sensors, industrial computers, IP cameras, network video recorders, programmable logic controllers, LED display screens and uninterrupted power supply units at each production facility and production line.

The FBR said the system will enable real-time monitoring of bottled water production, including object detection and counting, transmission of production data to the board’s central control unit, storage and archiving of data, detection of production stoppages and analytics for enforcement actions.

Under the directive, only vendors authorized by the FBR will be allowed to supply, install and maintain the monitoring systems.

The board also instructed chief commissioners of Inland Revenue to appoint dedicated focal persons to coordinate with bottled water manufacturers and authorized vendors to ensure timely implementation.

The notification was issued with the approval of the Member Inland Revenue (Operations) at FBR headquarters in Islamabad and took effect immediately.

The FBR has been expanding digital monitoring and track-and-trace mechanisms across sectors including tobacco, sugar, fertilizer and cement as part of broader efforts to curb tax evasion and improve revenue collection.