Pakistan Takes New Steps to Improve Tax Revenue Streams from Major Industries

Recognising the importance of track and trace systems for curbing tax evasion in key industries such as tobacco, cement, sugar, and fertiliser, the new Prime Minister of Pakistan, Shehbaz Sharif, has constituted a 10-member task force to address the technical, legal, and administrative challenges hindering the progress of such systems.

While tax stamps and track and trace have now been implemented in the tobacco, sugar, and fertiliser industries (and partially implemented in the cement sector – see page 6), the Federal Board of Revenue (FBR) had initially struggled with integrating the technology into existing business practices and IT infrastructure. Problems such as system crashes, data inconsistencies, and security vulnerabilities plagued the early phases of implementation.

These challenges, coupled with leadership changes within FBR, further complicated the implementation process. In particular, the frequent appointment of new, usually unenthusiastic, officers to oversee the track and trace project led to inconsistencies in policy direction and slowed down the decision-making process.