Pakistan’s tax authorities are preparing to take another major step toward controlling tax evasion and illegal trade. The Federal Board of Revenue (FBR) plans to widen the use of the Track & Trace System (TTS) by introducing it in more industries considered vulnerable to undocumented production and revenue leakage.
According to tax reform specialists, the focus is on sectors where underreporting and unrecorded manufacturing are widespread. By extending TTS to these high-risk areas, the government aims to bring more economic activity into the formal system and improve overall tax compliance.
At the heart of the Track & Trace System are Unique Identification Marks (UIMs), which are applied to products at the manufacturing stage. These secure, tamper-proof identifiers make it possible to monitor production levels almost instantly and follow products throughout the supply chain, from factories to retail outlets. This approach allows authorities to rely on real data rather than self-declared figures from manufacturers.
Experts note that UIM-based tracking provides clear visibility into actual production and sales. Any product found without a valid identification mark is immediately flagged as non-compliant, enabling enforcement agencies to quickly detect smuggled, unstamped, or illegally produced goods.
Initial reviews suggest that TTS has already delivered strong results in Pakistan. Data-driven inspections have uncovered hidden machinery, led to the seizure of illicit cigarette consignments, and recovered unstamped stocks of sugar and fertilizer. These actions signal a shift from traditional, random inspections toward more targeted and evidence-based enforcement.
The benefits of the system are not limited to the government alone. Consumers also gain from TTS, as UIMs allow buyers to verify whether a product is authentic and tax-paid. This improves consumer confidence, protects public health, and strengthens fair competition by supporting compliant businesses.
However, experts caution against replacing TTS with video monitoring systems. While surveillance cameras can record activity, they cannot accurately measure output, track individual products, or ensure complete supply-chain visibility. Such systems are also prone to technical limitations, including power failures, dust, poor lighting, and intentional obstruction.
In sectors such as fuel, pharmaceuticals, beverages, cement, and other high-speed production industries, video monitoring falls short in detecting adulteration or tracking goods moving rapidly along production lines. Additionally, video-based systems are costly, require constant maintenance, and may raise privacy concerns.
Based on international experience, experts emphasize that Track & Trace systems built around Unique Identification Marks should remain the primary tool for production monitoring. Video surveillance, they argue, should only serve as a secondary support mechanism. For Pakistan, maintaining UIM-based TTS as the core enforcement system is seen as essential for improving transparency, ensuring fair markets, and strengthening national revenue collection.