ISLAMABAD: The Federal Board of Revenue (FBR) has decided to roll out the much-awaited Track & Trace System to cover tobacco manufacturing across the country from November apparently to minimise tax evasion and crack down on illicit trade, a top tax official said on Thursday.

The system will come into effect from Nov 1 and the scope will be extended to cigarette manufacturing units located inside Azad Jammu and Kashmir, said FBR Chairman Dr Muhammad Ashfaq Ahmed.

He claimed that with implementation of the Track & Trace System and its extension into AJK coupled with Inland Revenue Enforcement Network’s (IREN) drive would help overcome the menace of counterfeit, illicit and non-tax paid cigarettes in the market.

Dr Ashfaq said that AJK government had approached the FBR to extend the scope of the track & trace system to cigarette manufacturing units located inside AJK territory.

The cigarette manufacturers contributed around Rs130 billion as duty and taxes in FY21.

A detailed analysis of the sector by Federal Tax Ombudsman shows that the FBR’s overall revenue collection has posted growth in FY21, but the shortfall at RTO Peshawar is apparently not understandable from the sector.

During the preliminary analysis, the FTO secretariat found out some apparently unexplainable gaps between the tax potential and tax revenue contributed by tobacco/cigarette sector in Pakistan.

Published in Dawn, September 10th, 2021