In a decisive move to combat tax evasion and ensure fair sugar prices, Prime Minister Shehbaz Sharif has implemented stringent measures targeting Pakistan’s sugar industry. These actions have led to a significant increase in tax revenues and intensified scrutiny of sugar production and sales.

Enhanced Tax Collection

According to official sources, the newly implemented monitoring and enforcement system for the sugar sector has boosted tax collections by 54%. In January and February 2025, Rs24 billion was collected, compared to Rs15 billion during the same period last year, despite stable sugar sales volumes.

Comprehensive Monitoring Measures

To curb tax evasion and hoarding, the government has introduced several oversight mechanisms:

  • Track and Trace Stamps: Implemented to monitor sugar production accurately.
  • Automated Counters at Hoppers: Installed to track the number of produced bags.
  • Video Recording and Digital Eye Counting: Utilized for real-time verification of production processes.
  • s-Track Invoicing System: Established to monitor sugar dispatches effectively.
  • On-Site FBR Staff: Deployed to oversee manufacturing and sales operations.

Additionally, the Federal Investigation Agency (FIA) and the Intelligence Bureau (IB) are actively monitoring operations to ensure transparency. To prevent collusion, FBR officers stationed at mills are rotated every ten days, complemented by CCTV surveillance and surprise inspections by senior officials.

Crackdown on Malpractices

The enforcement measures have led to significant actions against malpractices in the sugar industry:

  • Seizure of Fraudulent Bags: Over 100,000 empty bags bearing Track and Trace stamps were confiscated during the ongoing crushing season, allegedly intended to manipulate production records and evade taxes.
  • Sealing of Unauthorized Equipment: Ten chutes/hoppers in six sugar mills, not linked to the official monitoring system, have been sealed, with two dismantled subsequently.
  • Recovery of Penalties: A joint operation by the FBR’s Inland Revenue Enforcement Network (IREN) and the IB resulted in the seizure of 52,410 sugar bags, leading to penalties exceeding Rs125 million, in addition to the sales tax payable on the sugar sales.
  • Embargo on Godowns: Authorities have placed an embargo on the godowns of three sugar mills to recover Rs700 million in sales tax dues, with a total recovery of over Rs2 billion from previous tax periods.

These measures underscore the government’s commitment to ensuring fair pricing and transparency in the sugar industry, aiming to protect consumers and stabilize the market