The effective implementation of the Track & Trace System (TTS) has the potential to contribute billions of rupees 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 are progressing slowly. This delay is attributed to a lack of interest from the authorities and resistance from manufacturers involved in illicit activities.
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.
An international report on tax evasion stated that Pakistan faces significant losses, Rs.956 billion, due to tax evasion and illicit trade in key sectors. Specifically, the tobacco sector alone incurs losses of Rs.240 billion due to the activities of illicit cigarette manufacturers.
Recently, Prime Minister Shahbaz Sharif also took notice of the slow progress in the TTS implementation across key sectors. He instructed authorities to establish a committee tasked with identifying obstacles to TTS deployment and those implicated in tax evasion within seven days.
However, 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 manufacturers who resist adopting this system.
USAMA GHULAM RASOOL,
Karachi.
