ISLAMABAD: The Federal Board of Revenue has expanded electronic production monitoring to registered manufacturers of leather, paper and paperboard, extending a system intended to give the tax authority direct records of industrial output for sales tax administration.
The FBR issued SRO 1751 of 2026 on Wednesday to bring the sectors under the electronic monitoring provisions of Chapter XIV BA of the Sales Tax Rules 2006, as recorded in the FBR notification listing and reported by Dawn.
In a separate decision, the authority approved four vendors to supply, install, operate and maintain monitoring equipment for specified industries. The approved scope covers packaged tea, household electronics, paper and paperboard, edible oil and ghee, and leather, with the vendors’ authorisations applying to their assigned activities.
The equipment consists of internet-protocol cameras and network video recorders installed at production lines. Cameras are intended to capture manufacturing activity continuously, while the recording systems must retain footage for at least two months.
The arrangement is intended to help the FBR compare production activity with declarations submitted for tax purposes. That objective does not establish that any individual manufacturer has evaded tax; compliance findings would require a separate assessment of records and applicable rules.
Under the reported conditions, vendors are responsible for procurement, installation, operation, maintenance and repairs. Their authorisation is restricted to the specified camera and recording equipment, rather than providing a general licence to sell additional software or hardware to manufacturers.
The FBR will own the footage, which is to be treated as confidential. The reporting states that recordings may not be shared except as directed by the Board, an important condition because the system involves continuous observation of industrial premises.
The monitoring expansion comes as the tax authority pursues more direct ways of checking manufacturing output in sectors where production volumes affect sales tax calculations. The new notification builds on electronic monitoring already used in other industries rather than introducing the concept for the first time.
Manufacturers will need to establish which production lines and reporting obligations fall within the notification, while the FBR and authorised vendors will need to implement the equipment requirements. The published account does not establish a universal installation date for every affected factory.
The practical impact will depend on the notification’s implementation, the quality of recorded data and the procedures used to reconcile footage with tax returns.