The Federal Board of Revenue (FBR) plans to introduce automated production monitoring across 18 manufacturing sectors by December 31, 2026, as the government intensifies efforts to improve tax collection. Prime Minister Shehbaz Sharif has directed officials to remove obstacles delaying installation and ensure the system operates across all targeted industries.
The initiative aims to reduce tax evasion by monitoring production volumes and improving the accuracy of sales tax reporting. Moreover, the government wants to ensure that taxes collected from consumers reach the national treasury rather than disappearing through undeclared business activities.
Monitoring System Expands Across Industries
The production monitoring system is already operational in five sectors: sugar, cement, tobacco, tiles and fertiliser. Meanwhile, authorities are installing the system in textiles, bottled water, juice and milk industries.
The government has also set deadlines for purchasing equipment for additional sectors. Officials must arrange equipment for steel, poultry and tyres by October 15, while procurement for tea, household appliances, leather, paper, and edible oil and ghee must be completed by October 30.
The system uses digital technology and video surveillance to monitor manufacturing activity and identify discrepancies between actual production and declared sales. Consequently, officials expect improved transparency and more effective enforcement of tax regulations.
Government Seeks Higher Revenue Collection
During a review meeting, Shehbaz Sharif directed the relevant departments to address implementation delays and make the monitoring system fully operational within the deadline. He also praised businesses that voluntarily adopted the technology and recognised officials who assessed the manufacturing sector’s tax potential.
Furthermore, the prime minister called for third-party audits to evaluate the system’s performance and ensure it delivers the intended results. Authorities will examine whether monitoring improves tax compliance and helps identify revenue losses across industries.
The initiative forms part of broader FBR reforms aimed at expanding the tax base and strengthening revenue collection. However, its success will depend on effective implementation, reliable monitoring equipment and consistent enforcement across the targeted manufacturing sectors.
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