Digitalisation of tax system: PSMA for QR Code printed polypropylene bags

ISLAMABAD: The new government needs to replace printed paper stamps for the sugar industry under the Track and Trace system with QR Code printing on polypropylene bags to implement digitalisation of the tax system.

In this connection, Iskander M Khan, Chairman Pakistan Sugar Mills Association (PSMA) has written a letter to newly-appointed Finance Minister Muhammad Aurangzeb.

“The new Finance Minister’s vision of digitalisation of the tax system would be implemented through this QR Code technology which will eliminate the rampant tax evasion and increase the tax revenue to the GoP manifolds; besides digitalisation of invoices”, chairman PSMA said.

Under the plan of digitalisation of the tax system, the adoption of mandatory printing of QR Code on polypropylene bag produced for all sectors, i.e., sugar, cement, fertilizer, feed, wheat flour, rice, chemicals etc, supported by the digital invoices for online data transfer to FBR, this coupled with the installation of QR Code readers on the production lines during packaging of industrial products, will provide real time information to the FBR, the letter said.

According to the letter, the concept of QR Code printed polypropylene bags supported with the digital invoices under the Track and Trace system that was suggested to the FBR.

The implementation of the proposed system will eliminate the highest levels of illicit trade that eats up 20% of Pakistan’s formal economy because of the combination of high taxes, ineffective enforcement and poor documentation of economy, the letter said.

Due to this, cash-based economy thrives at the cost of billions of dollars of tax revenue by undermining the formal tax paying sector.

However, despite opposition by Pakistan Sugar Mills Association and Pakistan Polypropylene Association, the FBR opted for affixing of imported QR Code printed paper stamps for the sugar industry under the Track and Trace system, instead of QR Code printing on polypropylene bags during their production at the polypropylene factories, supported with digital invoices, the letter maintained.

The letter highlighted that the success of Track and Trace system is dependent on the automation and transfer of production data online to the FBR, as the automated system for affixing paper stamps on the polypropylene sugar bags for online transmission to FBR failed, therefore, the FBR has allowed the manual QR Code paper stamps affixation, encouraging the use of counterfeit paper stamps.

In the light of above, we request for the adoption of mandatory printing of QR Code on polypropylene bag produced for all sectors, i.e., sugar, cement, fertiliser, feed, wheat flour, rice, chemicals etc, supported by the digital invoices for online data transfer to FBR, this coupled with the installation of QR Code readers on the production lines during packaging of industrial products, will provide real time information to the FBR.

The use of QR Code technology will eliminate the rampant tax evasion and increase the tax revenue to the GOP manifolds; besides this, the digitalisation of invoices has been agreed by the government, the letter added.

Copyright Business Recorder, 2024