FBR Explores AI-Powered Video Analytics to Replace Track and Trace System

The Federal Board of Revenue (FBR) is considering introducing a video analytics based monitoring system as an alternative to the existing Track and Trace System (TTS) for Pakistan’s key manufacturing sectors. The new system aims to enhance production oversight through artificial intelligence and camera-based monitoring.

The Track and Trace System, currently deployed in industries such as tobacco, cement, sugar, and fertilizer, was introduced to strengthen tax collection and curb illicit trade. It works by placing secure, machine-readable tax stamps on products, enabling real-time tracking from factories to retailers. The TTS has been credited with boosting transparency and compliance in recent years.

According to officials, the FBR’s plan to explore video analytics seeks to diversify monitoring technologies and improve operational insights. Unlike TTS, however, the proposed system would rely solely on AI-driven cameras to count and record products on the production line  without marking or verifying them.

An industry expert commented,

“Video analytics can offer efficiency data but lacks product authentication and supply-chain traceability  crucial for tax validation and consumer assurance.”

Critics argue that while the move reflects FBR’s interest in digital innovation, it may reduce regulatory control and weaken deterrence against tax evasion if implemented without safeguards.

Earlier this week, the Federal Tax Ombudsman (FTO) warned FBR that its IT systems remain vulnerable to cybercriminals, urging stronger digital security measures. Meanwhile, the Auditor General of Pakistan (AGP) flagged a Rs. 2.36 billion sales tax lapse by the Universal Service Fund, highlighting ongoing challenges in fiscal governance.