A new digital surveillance system will directly transmit real-time industrial data to the FBR, tightening regulatory control over tax compliance
By our correspondent
ISLAMABAD: In a significant move aimed at bolstering tax compliance, the Federal Board of Revenue (FBR) has rolled out an electronic video monitoring system to oversee industrial production in real-time. The initiative, which aligns with the International Monetary Fund’s (IMF) demands for enhanced fiscal discipline, marks a major shift in Pakistan’s approach to tax enforcement and revenue collection.
Under the newly introduced system, digital surveillance will be integrated into industrial production units, ensuring that real-time data is transmitted directly to the FBR’s central control unit. This step is designed to minimize tax evasion by creating an unbroken record of manufacturing activities, making it increasingly difficult for businesses to underreport production or manipulate tax declarations. To formalize the implementation, the FBR has issued an official notification amending the Sales Tax Rules 2006, signaling a decisive move toward stricter compliance mechanisms.
According to the notification, any discrepancies between recorded production levels and tax payments will automatically trigger legal action. The system also mandates that no goods will be permitted to leave factory premises without being captured by the video monitoring network, effectively closing loopholes that previously allowed untaxed goods to enter the market. Surveillance equipment will be installed and maintained by licensed vendors, who will also be responsible for periodic technological upgrades, ensuring the system remains robust and effective against evolving tax evasion tactics.
The introduction of video monitoring is part of a broader set of measures aimed at curbing revenue leakages and tightening financial oversight. For years, weak enforcement and tax evasion have plagued Pakistan’s industrial sector, leading to significant revenue losses. The IMF, which has been pressing for reforms to improve tax collection, has emphasized the importance of adopting technological solutions to increase transparency and accountability. With this latest initiative, the government is not only meeting IMF requirements but also taking a proactive approach to closing gaps in the taxation system.
However, while the move is being hailed as a step in the right direction, concerns remain over its implementation. Industrialists have often resisted stringent monitoring measures, arguing that excessive government oversight could stifle business operations and increase compliance costs. Additionally, ensuring the integrity of the video surveillance system will be a challenge, as past attempts to digitize tax collection processes have faced resistance and technical setbacks.
