Islamabad, November 14, 2024 — A critical roundtable discussion on the Federal Board of Revenue’s (FBR) Track and Trace System (TTS) compliance was held today at the Marriott Hotel, Islamabad. Hosted by the Institute of Public Opinion and Research (IPOR) in collaboration with PILDAT, the event united key stakeholders, including government officials, industry leaders, policy experts, and media representatives, to evaluate the findings from IPOR’s latest study.
The session began with the welcome remarks by Mr. Mamoon Bilal, Advisor PILDAT, followed by presentation on the key findings from the IPOR study by Mr. Tariq Junaid, CEO of IPOR, who underscored the troubling levels of non-compliance within the industry.
Efforts to implement the track and trace system in the tobacco sector kickstarted in 2021 along with three other sectors – cement, fertilizer and sugar. Since July 2022 selling a cigarette pack without a track and trace stamp is illegal. However, since the deadline, track and trace compliance remain a distant dream.
IPOR conducted a market research study in 11 cities across Punjab and Sindh covering 40 retail outlets in 18 markets covering a total of 720 outlets. The focus of the study was twofold; ascertaining level of TTS compliance at point of sale and measuring compliance of the Minimum Legal Price (MLP) for cigarettes which is mandated by the FBR.
According to the report, out of 264 cigarette brands surveyed, only 19 fully adhered to the TTS regime requirements, which mandate the use of Track and Trace stamps. Non-compliant brands accounted for 58% of the market, comprising locally manufactured duty-not-paid (DNP) brands (65%) and smuggled brands (35%) with violations ranging from missing TTS stamps to non-adherence to pricing or health warning regulations.
Furthermore, 197 brands were found to be selling below the minimum legal price where as 48 brands which were selling above the MLP were non-compliant to the stipulated legal requirements. 19 brands were found to be compliant to all stipulated legal requirements and were selling above the MLP.
The roundtable provided a platform for stakeholders to engage in in-depth discussions about the challenges facing the TTS system, its enforcement at the retail level, and the overall impact of non-compliance on the FBR’s tax collection and public health efforts.
Key speakers included Mr. Muhammad Zaheer Qureshi, Project Director for the Track and Trace System at FBR, who outlined the current state of compliance enforcement and emphasized the importance of robust tracking mechanisms to deter tax evasion. He highlighted the challenges faced in implementing the Track and Trace System, including issues of industry compliance and technological adaptation, and shared insights into how the FBR is tackling these obstacles through enhanced regulatory oversight. and Hafiz Tahir Khalil, Senior Journalist and Bureau Chief Daily Jang, acknowledged the Federal Board of Revenue’s (FBR) efforts in implementing the Track and Trace System, highlighting it as a crucial step toward improving industry compliance and accountability. He emphasized the media’s role in raising public awareness and supporting regulatory initiatives.
The event was chaired by Mr. Ali Pervaiz Malik, MNA & Minister of State for Finance & Revenue, who shared his perspective on the government’s commitment to ensuring compliance within all the sector, stressing that enhanced regulatory measures are needed to achieve TTS goals. He highlighted the ongoing digitalization process and the importance of integrating technology to improve efficiency. He also emphasized that economic stability is a collective effort, requiring collaboration across all sectors. Mr. Malik underscored the need to raise awareness about these challenges to build a more resilient and stable economy.
Key Recommendations to Enhance Compliance:
The roundtable concluded with actionable recommendations, including:
- Strengthening enforcement at retail levels to curb access to non-compliant brands
- Increasing penalties for violations
- Launching public awareness campaigns to educate consumers on the significance of purchasing compliant products
The outcomes from this session represent a strategic step forward in enhancing regulatory compliance, supporting FBR’s tax collection objectives, and reinforcing public health initiatives. This event marks a significant advancement in ongoing efforts to improve TTS compliance and enhance FBR’s regulatory approach, contributing to stronger public health protections and more effective tax revenue collection within Pakistan.