The Federal Board of Revenue (FBR) plans to make technology-based tax monitoring systems operational across 18 manufacturing sectors by December 31, 2026, as the government moves to improve tax collection and reduce revenue losses caused by underreporting. The timeline was discussed during a meeting chaired by Prime Minister Shehbaz Sharif to review progress on FBR reforms and the installation of production monitoring equipment. According to the briefing, monitoring systems have already been installed in the sugar, cement, tobacco, tiles and fertilizer sectors. Installation work is currently underway in textiles, packaged water, packaged juice and packaged milk, with equipment procurement completed for these industries. The government intends to extend the system to additional manufacturing sectors over the coming weeks, using electronic monitoring to obtain more accurate information about production activity and improve the documentation of taxable transactions.
The next phase of the rollout covers steel, poultry and tyre manufacturing, for which equipment purchases are scheduled to be completed by October 15. Procurement for tea, domestic electronics, leather, paper and board, and oil and ghee is expected to be completed by October 30. These deadlines form part of the government’s broader schedule to bring all 18 targeted sectors under operational monitoring by the end of December. The systems rely on cameras and related monitoring technology to record manufacturing activity, allowing the tax authority to compare production information with figures reported by businesses. This can help officials identify discrepancies between actual output and declared production, particularly in industries where differences between reported and taxable activity can result in revenue losses. The implementation process will require equipment installation and operational integration across facilities in different industries, making progress on procurement and compliance important to meeting the year-end target.
The monitoring programme is part of a wider effort to use technology to improve tax administration and increase visibility into industrial production. During the meeting, officials briefed the prime minister on enforcement measures that had generated an additional Rs1.3 trillion in tax revenue over the previous three years, representing a reported 40 percent increase in collections. The meeting also reviewed progress on FBR reforms and the assessment of tax potential across productive sectors. Production monitoring is intended to provide tax authorities with more reliable information about manufacturing volumes and support the identification of gaps between potential collections and actual revenue. By using electronic records and camera-based systems, FBR aims to reduce reliance on figures supplied solely through business reporting and improve the ability of field teams to identify possible discrepancies. The effectiveness of the initiative will depend on the accuracy of the collected data, consistent implementation and the ability of the tax authority to act on irregularities identified through the systems.
The December deadline places pressure on FBR and the relevant industries to complete the remaining installation and procurement work within the announced schedule. Businesses operating in the targeted sectors will need to ensure that their facilities comply with applicable monitoring requirements as the programme expands. The rollout also follows earlier sector-specific measures involving video analytics in textile spinning and tile manufacturing, reflecting the gradual extension of electronic production oversight across Pakistan’s industrial base. However, the latest announcement does not provide a detailed breakdown of installation costs for each sector or specify how many individual manufacturing units remain to be connected. Further updates on implementation progress, compliance levels and the results of production audits will help establish how effectively the system is identifying unreported activity. With the government targeting full operation across all 18 sectors by December 31, the coming months will be important for determining whether the planned coverage can be achieved and how the expanded monitoring network contributes to tax collection.
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