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ISLAMABAD: Prime Minister Shehbaz Sharif on Monday warned that businesses collecting sales tax from consumers but withholding the amount instead of depositing it in the government exchequer would not be entitled to any concession, as he set December 31, 2026, as the deadline for completing and fully operationalising production monitoring systems across all manufacturing sectors.
Chairing a meeting to review Federal Board of Revenue (FBR) reforms, the prime minister ordered for removal of all obstacles to installing automated production monitoring systems for sales tax purposes. He said camera-based production monitoring under the faceless taxation system was being made more effective to improve tax compliance and enforcement.
According to a press release issued by the Prime Minister’s Office Media Wing, Shehbaz said the government would take all necessary measures to realise the country’s full tax potential and ensure effective enforcement of tax laws. He appreciated manufacturing businesses that were voluntarily installing the monitoring systems in line with government measures.
The meeting was informed that production monitoring systems had been fully installed in the sugar, cement, tobacco, tiles and fertiliser sectors. Installation was under way in the textile, packaged water, packaged juice and packaged milk sectors, where procurement of the required equipment had already been completed.
Equipment procurement for the steel, poultry and tyre sectors was scheduled to be completed by October 15, while procurement for the tea, household electronics, leather, paper and board, and oil and ghee sectors was expected to be completed by October 30. The system is to become fully operational across all these manufacturing sectors by December 31, 2026.
The prime minister was also briefed on resistance from some businesses to installing production monitoring systems in the textile sector. However, Nishat Mills, Alkaram Textile, Alkaram Cotton Mills, J.K. Spinning Mills, Surti Enterprises, Interloop Limited, Faisal Spinning Mills, Ibrahim Fibres Limited, Sapphire Textiles Limited and Nishat Chunian had voluntarily installed the systems. Shehbaz appreciated the companies for their cooperation.
Taking note of an audit report on the production monitoring system in the cement sector, the prime minister directed the Ministry of Information Technology to conduct similar audits in other sectors to assess the systems’ effectiveness.
The meeting was also presented with a comprehensive report examining the gap between the country’s tax potential and actual tax collection, including an assessment of additional revenue that could be generated through improved compliance and enforcement.
Officials informed the meeting that government enforcement measures had generated an additional Rs1.3 trillion in tax revenue over the past three years, representing a 40 per cent increase in collections.
The prime minister commended the FBR Transformation Team for its efforts in preparing the assessment of the country’s tax potential and identifying the gap between potential revenue and actual collections. He also appreciated the officials involved in preparing the report and presented them with shields at the conclusion of the meeting.
Separately, PM Shehbaz Sharif Monday ordered for doubling of financing for small and medium-sized enterprises (SMEs) from Rs1.1 trillion to Rs2.2 trillion by 2028, stressing their role in economic growth, job creation and business development across the country.
Chairing a meeting on the Small and Medium Enterprises Development Authority (Smeda), the prime minister called for reforms to facilitate entrepreneurs, improve access to bank financing and promote business opportunities, particularly in underdeveloped areas, to reduce migration to major cities.
He directed Smeda to raise public awareness about business loans and entrepreneurship and commission sector-specific feasibility studies through industry experts. The studies, he said, should be available in local languages to help aspiring entrepreneurs establish businesses.
The meeting was informed that Smeda was being transformed into a central platform for entrepreneurial training and access to financing, with offices being established nationwide. An artificial intelligence-based helpline was also being developed to provide guidance in local languages.
Officials further informed the meeting that Smeda had signed a memorandum of understanding with global e-commerce company Alibaba to train 10,000 SMEs over two years. Reforms were also under way to make the authority’s digital portal more effective and user-friendly.
The prime minister said empowering entrepreneurs in less-developed regions would stimulate local economic activity and contribute to balanced national development.
Meanwhile, PM Shehbaz Sharif directed the authorities concerned to develop the Daanish IT Park Islamabad into a world-class technology hub, fostering collaboration between academia and industry to create a modern IT ecosystem.
Chairing a meeting on the project, the prime minister said the government would continue efforts to equip Pakistani youth with modern skills in information technology, artificial intelligence (AI) and financial technology (FinTech), while creating new opportunities for IT entrepreneurs.
He directed the Ministry of Information Technology to conduct a comprehensive case study of the project, ensure its operationalisation in partnership with global technology companies and arrange a third-party audit.
The meeting was briefed on initiatives aimed at boosting IT exports and attracting investment in the technology sector. Officials informed the meeting that 50 private buildings had been upgraded into Software Technology Parks under the Pakistan Software Export Board (PSEB). Eight incubation centres had also been established nationwide to support startups, while 105 co-working spaces were operational to facilitate IT professionals.
The participants were further informed that global technology companies were being approached to help operationalise the Daanish IT Park Islamabad.
