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ISLAMABAD: The Federal Board of Revenue (FBR) has registered a significant growth of 11 percent in revenue collection from the sugar sector during July-December (2021-22) against same period of 2020-21 through implementation of Track and Trace System (TTS).

The data released by the FBR on Friday revealed that the FBR has collected Rs32.43 billion in the first six months (July-December) of current Financial Year 2021-22 as against Rs29.30 billion collected in the same period last year, achieving 11 percent growth.

This encouraging outcome of the digital monitoring of the sugar sector shows that TTS is contributing significantly to the prevention of revenue loss and resulting in increased revenue collection.

The installation process of TTS equipment was undertaken in October and November 2021 and all the Sugar Mills were delivered applicators along with tax stamps to be affixed on each sugar bag.

The FBR vide STGO No 5 of 2021 had notified that no sugar bags would be allowed to be taken out from a production site or a manufacturing facility without affixation of tax stamps and Unique Identification Marking (UIMs). However, TTS was formally inaugurated by the Prime Minister on November 23, 2021.

79.9pc increase in sales tax collection from sugar

In order to ensure enforcement of movement of sugar bags with tax stamps, Inland Revenue Enforcement Network (IREN) was entrusted with the task to combat tax evasion in the sugar sector.

Regional Enforcement hubs all across Pakistan were tasked to conduct raids on the un-stamped/non-tax paid sugar. As a result, all IREN hubs intensified their operations against supply chain operators to ensure the implementation of TTS in letter and spirit.

In this regard, the Directorate of I&I (IR), Hyderabad visited various sugar dealers in Hyderabad on 27th November 2021 and found a stock of 172 sugar bags manufactured by M/s Chamber Sugar Mills lying in the premises of M/s Gulzar & Co without tax stamps.

The same unstamped bags were taken into custody by IREN team which created deterrence in the market. Since then more than 65 raids have been conducted by Regional IREN Hubs of Rawalpindi, Lahore, Faisalabad, Multan, Karachi, Hyderabad, Sukkur, Quetta, and Peshawar in various cities and towns across the country but no sugar bags were found without tax stamps.

‘Track and trace’ system for sugar industry launched

The FBR initiated the implementation of Track and Trace System (TTS) in September 2021 immediately after the vacation of stay by the Sindh High Court on 20th August 2021.

Keeping in view the approaching crushing season, the FBR decided to implement TTS in sugar sector in order to digitally monitor the production of entire industry. The site surveys/factory visits were completed by the FBR’s licensee in the month of September 2021 and Tri-Partite Agreements (TPAs) were signed with all the 79 operational sugar mills of Punjab, Sindh and KPK in October, 2021 resulting in 100 percent coverage of sugar sector.

Advisor to PM on Finance and Revenue Shaukat Tarin has commended the FBR for successful implementation of this innovative digital intervention, resulting in sizeable increase in tax revenue.

Likewise, Chairman FBR/Secretary Revenue Division Dr Muhammad Ashfaq Ahmed has appreciated the outstanding performance of IREN squads in ensuring the desired compliance by the sugar sector, which has started paying dividends.

He further added that TTS was one of the key interventions introduced by the FBR to push its ongoing drive for digitisation to achieve transparency and thereby maximise tax compliance.

Copyright Business Recorder, 2021

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