Pakistan Reports 11% Higher Sugar Tax Revenues

Pakistan’s Federal Board of Revenue (FBR) has reported 11% higher tax revenues from the sugar sector, following the expansion of its tax stamp and track and trace system in November last year (the system was initially launched on domestically produced tobacco products earlier in 2021).

During the first six months of the 2021-22 financial year (July-December), the FBR collected PKR 32.43 billion ($183 million) in sugar tax, against PKR 29.30 billion ($166 million) collected in the same period last year.

The track and trace system was installed in all 78 sugar mills nationwide. The mills were supplied with application equipment along with the tax stamps themselves – and also along with a warning from the FBR that no sugar bags would be allowed to leave their premises without a tax stamp and unique identification mark attached to them.

Tax evasion in the sugar sector is estimated at 20-25% of the total market, and the track and trace system is intended to help the FBR gauge the real production levels of every sugar mill in order to ultimately recover the correct tax amounts.