The Federal Board of Revenue (FBR) has announced a new initiative to monitor the production of all sugar mills in Pakistan through video surveillance and a digital eye solution. The decision, aimed at ensuring transparency and curbing tax evasion, was notified through S.R.O. 2082(I)/2024, which amends the Sales Tax Rules, 2006.

Under the new system, the FBR, its Directorate of Intelligence, and respective field offices will be able to monitor and record sugar production in real time through integrated video surveillance. This move follows the failure of the previous Track and Trace System, which was introduced to oversee production and sales in the sugar industry.

Pakistan has 80 operational sugar mills that produce sugar for domestic consumption and export, along with by-products such as molasses and ethanol. These exports contribute to the country’s foreign exchange reserves, making the sugar industry a critical economic sector.

The new video surveillance system is part of a broader framework of oversight mechanisms already in place. These include:

• Track and Trace Stamps: To monitor production and sales.
• Automated Counters: Installed at hoppers to count the number of sugar bags produced.
• Video Recording and Digital Eye Counting: For real-time monitoring of production.
• Track Invoicing System: To oversee all sugar dispatches.
• On-Site Personnel: FBR staff are posted at each mill to supervise production and sales.
• The entire process is also monitored by teams from the Federal Investigation Agency (FIA) and the Intelligence Bureau (IB) to ensure transparency and compliance.

To ensure the efficacy of the new system, FBR personnel will be stationed at each sugar mill, with their activities monitored through CCTV cameras. Senior FBR officers will conduct frequent visits, while the Inland Revenue Enforcement Network will carry out random checks in the field. Additionally, enforcement measures will be supported by the Police and Pakistan Rangers, who will assist in monitoring and enforcement when required.

According to the notification, the production of sugar and related goods will be monitored through video surveillance, video analytics, and digital eye solutions from a date specified by the FBR through a separate order.