The government has told the International Monetary Fund that expanded production monitoring in the textile and other industrial sectors is expected to generate an additional Rs. 48 billion in tax revenue in FY2026-27, as Pakistan continues to tighten enforcement under its IMF-backed reform program.

The commitment was outlined in the IMF’s third review under the Extended Fund Facility and second review under the Resilience and Sustainability Facility.

According to the report, the Federal Board of Revenue is rolling out production monitoring systems in sectors with the largest documented tax gaps, with a particular focus on the textile industry. The move is part of a broader effort to improve compliance and strengthen sales tax collection by tracking production volumes more accurately.

The IMF noted that monitoring systems have already been fully deployed in the sugar, cement, tobacco, and fertilizer sectors, where the estimated tax gap is around Rs. 160 billion.

Meanwhile, the textile and beverage sectors are currently in the pilot phase. These sectors are expected to come under full monitoring by the end of October 2026.

To support the initiative, the FBR has assigned 200 personnel to operate and oversee the production monitoring systems. The aim is to improve the reporting of sales tax revenues by ensuring that actual production levels are more effectively captured and reflected in tax returns.

The IMF said the intervention is expected to increase reported revenues in sales tax filings and bring in an estimated Rs. 48 billion in additional tax revenue during FY2027.

The Fund added that the effectiveness of the monitoring regime will be measured through key performance indicators. These will include year-on-year growth in sales tax revenues from monitored locations, adjusted for nominal GDP growth, as well as the volume of goods detected through monitored production sites.