ISLAMABAD: The Federal Board of Revenue’s move to introduce production-line monitoring technologies in the beverages sector through Track & Trace System would improve monitoring and revenue generation in 2025-26.
Experts told media that the beverages industry in Pakistan, spanning carbonated drinks, juices, bottled water, and other packaged categories, contributes significantly to manufacturing output and employment. However, it remains exposed to tax-evasion risks arising from gaps in oversight and production visibility. Pakistan’s broader tax system already faces substantial leakages and the beverages sector is recognized as one of the areas where enhanced monitoring could significantly improve tax compliance.
From a revenue perspective, the risk landscape is considerable. Official estimates place the national tax gap at around Rs 3.4 trillion, with multiple sectors, including beverages.
Only sixteen businesses within this sector are reporting actual sales and such data point to under-reporting of production, untracked supply-chain flows, and diversion of products into informal channels.
To improve monitoring and revenue assurance, efforts are already underway to introduce production-line monitoring technologies in the beverages sector, including barcode-based systems and related digital controls. This aligns with the Federal Board of Revenue’s broader move to expand Track & Trace mechanisms across regulated industries, supporting improved governance and automation in tax administration.
A comprehensive Track & Trace System (TTS) can provide real-time visibility of manufacturing and distribution, verification of production volumes against tax declarations, deterrence of illicit trade and counterfeit beverage products, structured enforcement intelligence for targeted compliance actions.
Given the size of the leakages and the established success of traceability systems in other sectors (such as tobacco and sugar) in Pakistan, a phased rollout of TTS in beverages merits urgent consideration.
Introducing complementary tools like video analytics may enhance operational efficiency but cannot replace the core track-and-trace model which has demonstrated regulatory and fiscal effectiveness.
A secure fiscal marker is essential for Pakistan’s market as it ensures visible deterrence, consumer awareness, and product authenticity, enabling clear distinction between tax-paid and illicit goods. Embedded with security features, machine readability, and tamper-proof design, it allows regulators to verify, trace, and authenticate products across the supply chain.
The Track and Trace System has already proven its impact, with sugar sector revenues rising by 33% , and tobacco collections increasing from Rs61.79 billion to Rs83.5 billion (a 26% growth) following implementation.
In contrast, video analytics alone, based merely on product counting, cannot authenticate goods or detect evasion beyond factory premises, limiting its enforcement value.
There is an opportunity to significantly improve tax collection and supply-chain transparency in Pakistan’s beverages sector through strengthened digital enforcement mechanisms.
Copyright media, 2025
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