Sugar industry: major problems detected in FBR’s tracking and tracing system – Business & Finance

LAHORE: If not completely, then largely, the Federal Board of Revenue’s track-and-trace system has failed to control tax evasion in the sugar industry, reliable sources have said at Broad Lahore Tax Office (LTO).

According to the sources, the conveyor belts used for this purpose fail to hold the bags of sugar in the correct position after the automatic pasting of the barcode; therefore, the camera installed on the conveyor belt could not capture it and transmit it to the head office.

As a result, a large number of bags were not declared to the FBR despite efforts to automatically track and trace the production and sale of sugar. The Board had no choice but to handle the situation manually by deploying its staff under Section 40B of the Sales Tax Act, 1990.

The sources said field staff ensured documentation of 99% of sugar sector sales by taking control of sugar bags, manually placing barcodes and placing them correctly on the conveyor belt for cameras. advice.

“We took control of godowns containing empty bags to put barcodes on before handing them over to factory staff for refilling,” said an inspector, speaking on condition of anonymity. According to him, the management of the mills was not ready to cooperate and they carried out their task in a highly hostile environment.

“As most of the factory owners have a political background, so they were threatening to treat us harshly as soon as they were in power,” he added.

Furthermore, he pointed out that the management of the mills was not ready to provide them with proper accommodation, meals and medical care in case of illness. Another inspector said he faced acute respiratory problems for at least two months after returning from a sugar factory because it was not possible to maintain the production process by an ordinary person like him.

Sources said that LTO Lahore has set an example for the rest of the LTOs in the country by making the track and trace system viable. They pointed out that many sugar factories are headquartered in Karachi and most inspectors avoid visiting sugar factories in Punjab province, preferring to make fake entries to keep their books intact. They further added that many sugar mills in Punjab are considering moving their headquarters to Karachi to avoid strict vigilance from LTO Lahore.

Meanwhile, a good number of tax commissioners have also pointed out that the delegation of clerical staff to sugar mills under Section 40B is causing a shortage of necessary staff at the LTO, severely affecting the pace of work in general. About 60% of the staff are supposed to be away from the offices to perform duties in the sugar mills, hampering normal work at LTO. Not only the LTO, but staff from local Regional Tax Offices (RTOs) are also engaged to meet the demand for staff availability at factories to monitor production and sales.

Copyright Business Recorder, 2022

Rachel J. Bradford