Pakistan deploys tax officers to monitor beverage industry in Lahore and Karachi

The Federal Board of Revenue (FBR) has deployed more than 50 Inland Revenue officers across 21 beverage manufacturing companies to oversee production and sales, as part of an effort to tighten tax enforcement.

The deployment, which extends until June 2, comes under the authority granted by Section 40-B of the Sales Tax Act 1990 and Section 45(2) of the Federal Excise Act 2005. The FBR has directed the Chief Commissioner of Inland Revenue, Large Taxpayers Office in Lahore, to supervise beverage manufacturers, with a similar decision implemented by the Regional Tax Office Karachi.

Under these provisions, tax officers have been stationed at business premises to monitor production, distribution, stock levels, and record-keeping. The officers will submit a report on their findings following the monitoring period.

The government has also authorized the posting of tax officials at business sites to oversee production, stocks, and the supply of goods and services in the largely undocumented service sector. The move aims to tackle an underground economy estimated to account for more than 30% of GDP.

Last week, Prime Minister Shehbaz Sharif was briefed on three key amendments addressing legal and administrative gaps in the tax system. Implemented through the Tax Laws (Amendment) Ordinance 2025, one amendment—Section 175C—enables the FBR to assign tax officers to high-end services and sectors outside the existing sales tax framework.

Authorities say the measure ensures parity across industries, strengthening oversight and expanding fiscal space. Enhanced documentation of the high-revenue service sector could pave the way for potential reductions in personal income tax rates for salaried individuals, easing tax fatigue among documented taxpayers.