ISLAMABAD: The Prime Minister’s office, on the instructions of the prime minister, has constituted a five-member committee to ascertain the reason for the delay in full implementation of the Track and Trace System (T&TS) in major sectors prone to revenue leakages.
The committee has been tasked to identify causes of delay in the full implementation of the Track & Track System with fixation of responsibility.
The committee is to determine the role of FBR officers for apparent lacunas in terms and conditions of the contract leading to unresolved technical issues and inordinate delays in the full rollout of the system.
The committee will also examine the efficacy of the selection process of vendors, in view of the complete disconnect between the requirements of T&TS in identified sectors and technical options made available.
The committee will also investigate contractual lapses by FBR as well as by the vendor that resulted in delays and poor outputs from the initiative, with a fixation of responsibility.
It will also recommend a way forward, including the option of termination of the contract of the current vendor (as per terms and conditions of the contract) due to extremely poor performance, and selection of a new world-class vendor having expertise in such systems in countries comparable to Pakistan.
Sources said that despite numerous challenges faced, even a partial implementation of the Track and Trace System across the sugar, fertilizer, and tobacco sectors has contributed significantly to assisting the revenue authority in enhancing tax revenue generation.
It is pertinent to note that the tax revenue authority collected Rs. 7,164 billion in FY23 compared to Rs. 6,148 billion in FY22 which reflects a remarkable improvement.
Sources added that FBR has surpassed the 9-month target of Rs. 5,828 billion for FY24, registering a growth of 30 percent.
While discussing the challenges, sources revealed that there have been numerous delays and resistance to the digitization attempt such as writs/legal stays, deferred signing of the Tri-Partite Agreement (TPA), acquisition of automation machinery, and several other prerequisites which caused delays in implementation of the system across the industries, resulting in significant losses to the national exchequer, and due to which the true potential of T&TS is yet to be witnessed.
Moreover, it seems certain elements within FBR have been continuously supporting the industry in its delaying efforts, such as repeat extensions granted to the cement sector without any penalties.
The efficacy of the T&TS is evident by the strong resistance being faced to changes to the status quo from all quarters and the complaints about the system. In addition, the grant of continuous extensions to the industry coupled with limited enforcement by relevant authorities has prevented a complete rollout to date.
Given the criticality of the program for the national economy, and the continuous insistence of IMF to ensure complete rollout across the four sectors, FBR is considering further strengthening their enforcement efforts and may start imposing penalties and fines on non-compliant manufacturers with active monitoring of distributor and retail outlets.
Sources suggested that the system may be extended to other sectors such as fuel, leveraging the existing licensee’s world-renowned ability in fuel marking programs, and its applicability for use in pharmaceuticals, beverages, and other consumer goods sectors, sources added.
