PM sets 31 December deadline for FBR camera monitoring of factory output
Sugar, cement, tobacco, tiles and fertiliser plants are already covered. Eight more sectors, including steel, poultry and tyres, had equipment deadlines in October.
Prime Minister Shehbaz Sharif has ordered the Federal Board of Revenue to have automated production monitoring running in every identified manufacturing sector by 31 December. He gave the order on 12 October at a review of FBR reforms in Islamabad, attended by ministers including Azam Nazeer Tarar, Musadik Malik, Ahad Khan Cheema and IT minister Shaza Fatima Khawaja, along with Minister of State Bilal Azhar Kayani and adviser Haroon Akhtar. The FBR told the meeting that production in covered sectors is already being watched through cameras.
The cameras are installed in factories and run under the FBR's faceless system, so that officials can monitor what a plant produces. The aim is to narrow the gap between what Pakistan collects in tax and what it could collect. Sharif told officials to remove any obstacle to installing the equipment.
Where the rollout stands
Monitoring is fully installed in five sectors: sugar, cement, tobacco, tiles and fertiliser. Installation is under way in textiles, packaged water, packaged juice and packaged milk, where the equipment has been bought. Steel, poultry and tyres had until 15 October to complete procurement, and tea, household electronics, leather, paper and board, and oil and ghee have until 30 October.
Some textile mills resisted. Ten installed the systems voluntarily and were praised by the prime minister: Nishat Mills, Al Karam Textile, Al Karam Cotton Mills, J.K. Spinning Mills, Soorti Enterprises, Interloop, Faisal Spinning Mills, Ibrahim Fibres, Sapphire Textiles and Nishat Chunian. He urged other manufacturers to follow.
The audit and the tax gap
Sharif reviewed an audit of the cement sector's monitoring system, one of the five sectors with full installation, and asked the IT ministry to audit the system in the other sectors to test whether it works. The reports on the meeting do not give the audit's findings.
An FBR Transformation Team report estimated the gap between potential and actual tax collection, and the extra revenue better compliance could raise. The meeting was told that government measures over the past three years had raised Rs1.3 trillion in additional tax, a 40 percent increase in the collection measure cited. Sharif praised the team for its round the clock efforts, presented shields to its members and called collecting tax at full potential a service to the public.
He also said that businesses that collect sales tax from customers and then keep it deserve no concessions. The next checkpoint is 30 October, when the equipment for tea, household electronics, leather, paper and board, and oil and ghee is due.
