Production Monitoring in Pakistan – From Cigarettes to Day-Old Chicks!

Although Pakistan is still grappling with the nationwide rollout and effective enforcement of its tax stamp and production monitoring system – introduced in 2021 on tobacco products, sugar, cement and fertiliser – the Federal Board of Revenue (FBR) has now turned its attention to extending a similar system to other sectors at high risk of tax evasion – including tiles, tyres, iron and steel, cotton bales, beverages... and day-old chicks!

In fact, if FBR’s current procurement projects are anything to go by, it won’t be long before production monitoring controls extend across much of Pakistan’s formal manufacturing base.

However, extending the system into new sectors before it has been fully stabilised in the current ones, runs the risk of replicating – and amplifying – existing weaknesses across a far broader industrial base, with limited corresponding gains in tax revenue.

Let’s take a closer look at the challenges encountered with Pakistan’s current production monitoring coverage, as well as consider the latest batch of procurement notices directed at new sectors, and how FBR will need to strengthen its institutional capacity before embarking on this ambitious expansion.