Years of effort to install the Track & Trace System (TTS) across various sectors have fallen short of completion, painting a grim picture of the Federal Board of Revenue’s (FBR) performance.
The track and trace system, inaugurated by the former government in 2021, aimed to modernize tax evasion detection and ensure transparency. However, the FBR’s repeated failure to implement this crucial system has cost the exchequer billions of rupees annually.
The FBR’s struggle to implement the track and trace system spans over 15 years, marred by delays caused by court cases and other bureaucratic hurdles. Despite the system’s potential to streamline revenue collection and combat tax evasion effectively, its full integration remains a distant goal.
It is worth mentioning here that only two tobacco companies have fully implemented TTS on their premises, while the other 50 remain outside its purview.
In a recent review meeting, Prime Minister Shahbaz Sharif also expressed dissatisfaction with the FBR’s performance in implementing the track and trace system across four major industries, including sugar, cement, fertilizer, and tobacco sectors.
“The delay not only translates into economic losses for the country but also exacerbates challenges for tax-paying industries like tobacco,” said an expert.
Alarmingly, he added that the illicit tobacco market share has surged to over 60%, the highest among Asian countries, leading to an annual revenue loss of approximately Rs 310 billion.
“The FBR’s inability to implement the track and trace system after 15 years is a glaring failure, resulting in significant revenue losses and hindering efforts to curb tax evasion,” he said.
He urged the government to take urgent and decisive action to implement the TTS across all tobacco companies to reduce tax evasion and generate revenue to address the budget deficit.
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