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September 22, 2020

FBR plans IP cameras to monitor manufacturing of consumer goods

Business

September 22, 2020

KARACHI: The Federal Board of Revenue (FBR) has decided to install internet protocol cameras at different manufacturing sectors to undertake real-time monitoring of production process in a bid to curb tax evasion, sources said on Monday.

The FBR has amended Sales Tax Rules 2006 to monitor the production of consumer goods through surveillance cameras on a real-time basis. According to the amended rules, the FBR will have access to the manufacturing of goods of consumer products through intelligent video surveillance, and video analytics by installation of equipment including video cameras and sensors.

The FBR said the surveillance of production would be done in case of goods specified in the Third Schedule of the Sales Tax Act 1990 and any other goods notified later. The Third Schedule of the Sales Tax Act 1990 covers goods, which are sold in retail packing in the open market. The goods include fruit juices, ice cream, aerated waters/beverages, squashes, cigarettes, beauty soaps/shampoos/toothpastes/perfumes/cosmetic items.

The FBR will also install cameras at the production facility of goods, including tea, powdered milk and spices. However, the priority of the FBR is to monitor fertilisers, cements, mineral/bottled water, home appliances, paints, lubricant oils, automotive batters, tyre tubes, motor cycles, which are also part of the Third Schedule.

The FBR sources said the tax authorities detected huge tax evasion in these sectors, which are part of the Third Schedule. A number of cases have been detected where companies suppressed the sales to reduce the payment of taxes.

By enforcing the installation of surveillance cameras the FBR would get real-time footage of the production of goods, they said. Under the new rules, the surveillance would cover real time data that shows production through object detection and object counting, transmission of data to control room at the FBR on real-time basis, storage and archiving of data, detection of unexpected stoppages, quantitative analyses of production, and data analytics for required legal actions.

The sources said the factory owners of manufacturing of such goods would

require to get registration with the FBR for sharing real-time production of the goods. A committee of the FBR would visit the factory premises manufacturing such goods for sending recommendation to the FBR for installation of the surveillance cameras.

In case illegality of any kind is identified at the production facility the premises will be sealed, the sources said. The premises would only be de-sealed after the permission of Commissioner Inland Revenue.