ISLAMABAD: The Federal Board of Revenue (FBR) has announced strict enforcement measures against textile spinning units that fail to install its mandatory video analytics monitoring system, known as the “Digital Eye,” at their production facilities.
The tax authority has directed all field formations to ensure immediate implementation of the monitoring system and to initiate “iextreme enforcement measures” against non-compliant units.
These actions may include import embargoes, sealing of premises, suspension of sales tax registration, financial penalties, blacklisting, and denial of clearance for finished goods.
Out of 421 registered spinning units nationwide, approximately 300 are currently operational. The FBR plans to complete installation of the Digital Eye system at these facilities to monitor the movement of cotton bales and curb tax evasion.
Officials view the spinning stage as a critical checkpoint in the textile value chain to detect the use of untaxed cotton. Electronic monitoring was initially scheduled to begin on November 1, with the deadline later extended to December 31, 2025. Following the expiry of the extended deadline, the FBR has decided to proceed with enforcement.
Pakistan’s textile industry consumes around 13 million cotton bales annually. While about 9 million bales fall within the tax net, a significant quantity is reportedly traded without payment of sales tax — commonly referred to as “Gol Maal” cotton.
The FBR aims to bridge this documentation gap through advanced video analytics. To facilitate compliance, the authority offered a tax credit for installation costs and formed a joint implementation committee with the All Pakistan Textile Mills Association (APTMA).
Some spinning units approached the Lahore High Court seeking relief; however, no stay order was granted against the monitoring initiative.
With legal obstacles cleared, officials state that the FBR is determined to enforce the Digital Eye system and take action against units that continue to resist compliance.
