Pakistan Poised to Enact Tracking System

Pakistan’s Federal Board of Revenue (FBR) has signed agreements with 22 tobacco manufacturers to install a track-and-trace system at their factories, reports The News International.

The digital system, which allows the FBR to monitor the production, distribution and sale of tobacco products through unique identification codes and stamps on cigarette packs, is expected to increase the tax revenue from the tobacco sector, which contributes about 1.5 percent of the total tax collection in Pakistan.

The FBR initiated the system two years ago. Pakistan Tobacco Company (PTC) and Philip Morris International were the first to sign agreements and make the system operations, followed by Khyber Tobacco Co.

Now the FBR has signed agreements with 18 more manufacturers.

There are between 26 and 30 tobacco manufacturers in Pakistan, according to FBR estimates, though some of them are not operational or have moved to nominally self-governing territories such as Azad Jammu and Kasmir.

The implementation of the track-and-trace system has been marred by legal challenges. With the exception of one case, all these challenges have been rejected in court.  

FBR officials expect the system to become operational by October 2023.