ISLAMABAD: Prime Minister Imran Khan has expressed the hope that the track and trace system (TTS) being launched in the country will help generate additional revenue.
The prime minister in a tweet on Friday described the launching of TTS by the Federal Board of Revenue (FBR) as more good news.
“It will boost additional revenue, digitise the economy, curb counterfeiting — all steps towards effective and transparent governance system,” he maintained.
Earlier in the day, Finance Minister Shaukat Tarin inaugurated the much-awaited TTS at the Pakistan Tobacco Company (PTC), Jhelum.
FBR chairman Ashfaq Ahmed, along with Member Inland Revenue (Operations) Qaiser Iqbal, TTS Project Director Tariq Sheikh and PTC CEO Ali Khan attended the meeting.
Tarin praises FBR for rolling out the project for tobacco sector
At the outset, Mr Tarin praised the FBR for rolling out this significant project for the tobacco sector which would help prevent leakage of revenue, under-reporting of production and sales of tobacco products and ensure proper payment of federal excise duty (FED) and sales tax on the manufacture and sale of the products.
The FBR is also preparing to implement TTS in sugar, fertiliser and cement sectors in the near future.
“TTS is a very comprehensive and robust electronic monitoring system, which is a paradigm shift from a conventional physical monitoring system. It is believed that installation of the TTS in the notified sectors would be a game-changer for improving revenue and curbing counterfeit products in the market,” Mr Tarin said.
Mr Tarin said in an official announcement that it was heartening to see that the FBR had successfully issued a license and subsequently, signed a contract with AJCL/Mittas/Authentix Consortium for installation of TTS on March 5, 2021.
This system is to be developed, operated and maintained by the licensee for notified sectors including tobacco products manufactured in and imported into Pakistan. For this purpose, the FBR was striving hard to implement the system for past 12 years, but unfortunately, it resulted in five unsuccessful attempts. However, in its sixth attempt, the FBR has procured one of the best TTS available after strenuous efforts of over a decade.
Mr Tarin said: “Our prime objective was to take the tax-to-GDP ratio to 20 per cent in coming years which currently stood at 8-12pc.” He surmised that currently tax evasion of Rs70 billion was being done in the tobacco sector which made 37pc of market share.
The finance minister also stated that the Economic Advisory Council had been directed to identify more sectors where the TTS could be installed to increase revenue.
FBR Chairman Ashfaq Ahmed said that electronic monitoring of common-use products right from the entry-point into the supply chain, that is, production or import till the exit-point, that is, purchase by end-consumer — broadly referred to as TTS — is being viewed as a watershed development in maximising revenue potential in the notified sectors.
“TTS entails application of Unique Identification Marks (UIMs) or Tax Stamps carrying covert, semi-covert, overt, forensic and digital features enabling electronic traceability of goods across the supply chain,” he added.
He said that the UIMs applied on industrial products would help identify, isolate and curb the production, supply and movement of untaxed, counterfeit and smuggled goods thereby strengthening governance and rule of law in Pakistan.
“Presently, TTS is used in over 80 countries to apply about 10 trillion UIMs on various products, across the globe,” he added.
Mr Ahmed reaffirmed that this system would be further strengthened by vigilant, efficient and fully equipped Inland Revenue Enforcement Network (IREN) and the federal government had already allocated Rs435 million for the purchase of vehicles, state-of-the-art equipment and latest technology-driven gadgets for the enforcement network.
“The IREN will be able to combat evasion and leakages of taxes and duties payable on notified goods, through the Enforcement Squads that shall patrol the designated routes on which specified goods are moving and check a vehicle or any place of storage, wherein reportedly such specified goods are being transported, stored or kept,” he explained.