Tobacco cos: FBR ready to implement track-and-trace system

ISLAMABAD: After successful installation of track and trace system at 78 sugar mills, the Federal Board of Revenue (FBR) is all set to install the system at tobacco manufacturers, following signing of the tripartite agreements with cigarette manufacturers.

Sources told Business Recorder here on Monday that the tripartite agreements have been inked with the two leading cigarette manufacturing companies last week.

The agreements were signed among the manufacturers, the FBR and the consortium AJCL/Mittas/ Authentix for the implementation of Track and Trace System (TTS).

The system has already been launched at one company at Jhelum.

The rolling out of this project, which would help prevent leakage of revenue, under-reporting of production and sales of tobacco products and ensure proper payment of the FED and sales tax on the manufacture and sale of the products.

The electronic monitoring of common-use products right from the entry-point into the supply chain, that is, production or import till the exit-point, that is, purchase by end-consumer–broadly referred to as Track and Trace System (TTS) – is being viewed as a watershed development in maximising revenue potential in the notified sectors.

The TTS entails application of Unique Identification Marks (UIMs) or Tax Stamps carrying covert, semi-covert, overt, forensic and digital features enabling electronic traceability of goods across the supply chain.

The UIMs applied on industrial products would help identify, isolate, and curb the production, supply and movement of untaxed, counterfeit and smuggled goods thereby strengthening governance and rule of law in Pakistan. Presently, the TTS is used in over 80 countries to apply about 10 trillion UIMs on various products, across the globe.

The Track and Trace Solution is to be rolled out in a multi-phase manner across the tobacco, cement, sugar and fertiliser sectors in Pakistan with a view to enhancing tax revenue, reducing counterfeiting and preventing the smuggling of illicit goods through the implementation of a robust, nationwide, electronic monitoring system of production volumes and by the affixation of more than five billion tax stamps on various products at the production stage, which will enable the FBR to track the goods throughout the supply chain.

Copyright Business Recorder, 2022