A bigger net

The effective implementation of the track and trace system (TTS) has the potential to contribute billions of rupees in additional revenue to the national treasury, which is currently being lost to illicit trade. However, the implementation and installation of TTS in manufacturing units across key sectors such as sugar, cement, fertilizer, and tobacco is progressing rather slowly. This delay may be due to a lack of interest from the authorities and resistance from businesses involved in illicit activities or not too keen to declare their income in full.

There is a consensus among industry experts, legal compliance companies, and to some extent, the government, that the track and trace system is not only instrumental in widening the tax net by incorporating tax evaders but also represents the only long-term solution to the nation's revenue challenges. In 2023, an IPSOS report on tax evasion revealed that Pakistan faces significant losses, Rs 956 billion, due to tax evasion and illicit trade in key sectors. Temporary fixes will not resolve Pakistan's revenue issues. A sustained effort to expand our tax base is crucial. To this end, there is a need for the government to expedite TTS implementation and take decisive action against businesses who resist adopting this system.

Usama Ghulam Rasool

Karachi