Cement Sector in Pakistan Adopts Track and Trace System to Combat Tax Evasion

The Cement sector has successfully adopted a Track and Trace System, following directives from the Federal Board of Revenue (FBR). This system ensures real-time monitoring of cement production to ensure accurate tax calculations.

The FBR had been working towards this implementation since July 1, 2022, building on its success in implementing the system in the tobacco industry. The move aims to combat underreporting of production figures by manufacturers, which leads to tax evasion and the growth of the black market. By directly monitoring and taxing production, the government aims to curtail these practices.

Under this system, manufacturers will be required to label each cement bag with a unique stamp that can be scanned before sale. The data from these scans will be sent to the FBR, allowing them to calculate and collect taxes based on actual production figures. This approach has proven effective in other countries as a means of ensuring accurate tax collection.

Successful demonstrations of the Track and Trace System were conducted in various factories. However, there were delays from cement manufacturers in adopting the system.