FBR set to roll out new system to check sugar smuggling, tax evasion

Published September 24, 2023
Sugar price has recently hit Rs200 per kg due to massive exports allowed by the PDM government and unbridled smuggling. — Online
Sugar price has recently hit Rs200 per kg due to massive exports allowed by the PDM government and unbridled smuggling. — Online

ISLAMABAD: After the failure of the Track and Trace System (TTS) laun­ched in 2021, the Federal Board of Revenue has rolled out a new software-based sales tracking system to monitor the movement of sugar from mills to the consumer market to control tax evasion in the industry.

The FBR is currently in the testing phase of the cutting-edge software na­m­ed the “Sales Tracking Sys­tem” and the official launch of the new system is scheduled for the end of the current month, a senior tax official told Dawn on Saturday.

The FBR will try again to document the actual production, sales and supply of sugar, which is controlled by the political elites of the country. One of the reasons for the failure of the TTS was that the staff could not monitor the production of sugar, as most of the mills were owned by the influential politicians of the country.

The new software will be installed at all 78 sugar mills across the country to monitor real-time supplies from these factories, which will help in controlling tax evasion as well as smuggling of the commodity. The FBR hopes that the new system will help curb tax evasion and hoarding, which have been the main causes of the sugar crisis.

The FBR estimated that the sugar sector used to avoid paying 20 to 25 per cent of taxes and hoped that the TTS would help measure the actual production of each sugar mill. However, the system failed to achieve its goals and the FBR could not monitor the sugar industry effectively.

The new system will tra­ck the sugar movement fr­o­m mills before it is despatched. The relevant district administration will ha­ve access to the details of this movement. The relevant cane commissioners wi­ll also be able to see this data.

The details will include invoice numbers, buyer shop addresses, district, province and transportation routes.

The software will also allow the officials of district administration, Frontier Corps and customs at the joint checkposts on the route to access all the details of the sugar movement and verify the quantity of sugar on the spot. They will check if the number of sacks despatched from the mills matches the number of sacks transported.

The FBR plans to launch the new software officially before the start of the sugarcane-crushing season, which will begin in two months. This comes at a time when the country faces a record-high increase in sugar prices, which reached Rs200 per kg across the country.

According to unofficial estimates, nearly 800,000 tonnes of sugar had been smuggled across the western border. At the same time, the PDM government allowed the export of 250,000 tonnes of sugar since February. The ECC has banned the export of the sweetener in early August.

Published in Dawn, September 24rd, 2023

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