The Federal Board of Revenue (FBR) has stepped up enforcement against textile spinning units that have refused to install video analytics systems, commonly called the “digital eye.” The system is designed to track cotton bales that are being moved or consumed without paying sales tax, a practice locally known as “Gol Maal.”
Out of 421 registered spinning units in Pakistan, around 300 are currently operational. The FBR has made it clear that these units must install the system or face penalties including import bans, fines, blacklisting, suspension of sales tax registration, and even closure of business premises.
The tax authority had initially set a deadline of November 1, 2025, for installation, which was later extended to December 31, 2025. That deadline has now passed, and the FBR has made it clear that no further delay will be tolerated. Units that comply with the installation will be eligible for a tax credit to offset costs. A joint committee has also been formed to oversee the rollout of the system.
Each year, Pakistan’s textile spinning units consume roughly 13 million cotton bales. Of these, only 9 million are accounted for under the tax system. The remaining 4-5 million bales are either used locally without taxes or imported, creating a significant gap in revenue collection. The FBR’s “digital eye” system intends to reduce this gap and make the supply chain more transparent.
The All Pakistan Textile Mills Association (APTMA) previously opposed the installation of such monitoring systems and even challenged it in court. However, the Lahore High Court did not issue a stay, allowing FBR to continue with enforcement.
