The Federal Board of Revenue (FBR) has issued new directives aimed at improving transparency and accountability in manufacturing processes, requiring manufacturers to implement a video surveillance system to monitor production at their facilities. This move, aimed at enhancing the enforcement of tax regulations, is part of an amendment to the Sales Tax Rules and mandates that no goods can be removed from business premises unless they have undergone the required production monitoring process.
The new rules, outlined in S.R.O. 364 (I) 2025, were officially announced on Friday. According to the amendment, manufacturers involved in the production of specified goods must ensure that their production processes are monitored through video surveillance, video analytics solutions, and digital tracking technologies. The FBR emphasized that this monitoring must be done in real-time, with the installation of approved production monitoring equipment at the production lines. This equipment will facilitate the real-time capture of production processes, ensuring that manufacturers comply with tax regulations and reduce the possibility of tax evasion.
Under the new regulations, the production process for specified goods manufactured in Pakistan must be continuously monitored using a combination of video surveillance and advanced digital tracking systems. These systems are designed to capture data on the production line, including object detection and object counting, enabling the FBR to track the quantity and nature of goods being produced. The surveillance systems will also be capable of transmitting this data to a Central Control Unit (CCU) at the FBR on a real-time basis, ensuring that the Board has immediate access to critical production data.
The data collected by these systems will serve several purposes. First, it will be used for storage and archiving, ensuring a secure record of all production activities. Second, the system will be designed to detect any unexpected halts in production, which could signal irregularities or attempts to manipulate production records. Furthermore, the system will provide quantitative analyses of production data, allowing the FBR to carry out data-driven assessments and take necessary legal actions when required.
The FBR’s move to enforce video surveillance at manufacturing facilities reflects a broader push towards digitalization and automation in Pakistan’s tax monitoring systems. By leveraging video analytics and digital tracking tools, the FBR aims to improve efficiency, reduce instances of fraud, and ensure that manufacturers are complying with their tax obligations. The new regulations also align with global trends in using technology to streamline tax administration and promote greater transparency in industrial operations.
Manufacturers will now need to invest in the required technology and equipment to meet these new standards. The FBR has indicated that only approved production monitoring systems will be accepted, and manufacturers are expected to ensure that their facilities are compliant with the regulations within the stipulated timeframe. This change is expected to have significant implications for businesses in the manufacturing sector, as they will now need to adapt to these new compliance measures.
Overall, the FBR’s introduction of video surveillance requirements for production monitoring is a step towards modernizing the country’s tax collection system. By ensuring that goods cannot be removed from factory premises without undergoing the necessary monitoring process, the FBR aims to create a more transparent and accountable manufacturing environment, ultimately benefiting both the government and compliant manufacturers.
As Pakistan continues to embrace digital solutions for various administrative processes, this new regulation signals a shift towards smarter and more efficient governance. Manufacturers and industry stakeholders must now navigate these new requirements to ensure continued compliance and avoid potential legal consequences.