ISLAMABAD: Prime Minister Shehbaz Sharif on Monday directed the Federal Board of Revenue (FBR) to complete the digital monitoring system of sales production in major industries by the end of December, as part of efforts to narrow the gap between actual and potential tax collection.

Chairing a meeting in Islamabad to review FBR reforms, the premier instructed tax authorities to ensure production monitoring for sales tax across all manufacturing sectors by the year end, an official statement said.

It added that officials gave a detailed presentation to the premier on the results achieved so far from the industries already under the monitoring system.

The meeting was informed that the digital monitoring system had been fully installed in sugar, cement, tobacco, tiles and fertilisers sectors. The monitoring system was in the process of being installed in the textile, packaged water, packaged juice, and packaged milk sectors, and the purchase of equipment for this purpose had been completed, the meeting was told.

It was further informed that the purchase of equipment for the sectors of steel, poultry, and tires will be completed by Oct 15, while for tea, household electronics, leather, paper and board, and oil and ghee, the purchase will be completed by Oct 30.

As a result, the monitoring systems in all these production sectors are expected to be fully operational by Dec 31, it was told.

The meeting was informed that in the textile sector, some industries had shown resistance to the installation of the monitoring system. However, Nishat Mills, Al-Karam Textile, Al-Karam Cotton Mills, J.K. Spinning Mills, Soorti Enterprises, Interloop Limited, Faisal Spinning Mills, Ibrahim Fibers Limited, Sapphire Textiles Limited and Nishat Chunian had voluntarily installed the monitoring system in compliance with government measures.

PM Shehbaz appreciated these companies for their cooperation.

A review report on the gap between actual and potential tax collection was also presented to the premier, which provided an estimate of the country’s tax potential and assessed additional revenue that could potentially be generated via improved tax compliance and enforcement.

The meeting was informed that due to government measures over the past three years, an additional Rs1.3 trillion in tax had been collected — a 40 per cent increase in tax collection. This additional tax was collected due to enforcement measures, it was told.

During its briefing, the FBR said that production monitoring was being made effective with the help of cameras under the faceless system.

“The prime minister directed the removal of all hurdles in the installation of automated production monitoring systems,” the statement said.

He also noted that businesses collecting and pocketing taxes from consumers themselves instead of depositing it into the national exchequer were not entitled to any concessions.

The premier said that those businesses in the production sector that were voluntarily installing the monitoring system were viewed with appreciation. He added that all necessary measures would be taken to achieve the country’s “full tax potential” and ensure effective enforcement of tax laws.

He commended the FBR Transformation Team for its “round-the-clock efforts” in preparing the comprehensive assessment and identifying the gap between potential revenue and actual collection. He also appreciated the officials involved in preparing the report, presenting them with shields after the meeting.

The prime minister said that to assess the effectiveness of the production monitoring system, the IT ministry should also conduct audits in other sectors. He termed the collection of tax in accordance with the country’s full tax potential a “true service to the public”.

The meeting was attended by Federal Ministers Azam Nazeer Tarar, Dr Musadik Malik, Ahad Khan Cheema and Shaza Fatima Khawaja, as well as Minister of State Bilal Azhar Kayani, Advisor to the Prime Minister Haroon Akhtar, and relevant senior officials.