PRIME Minister Shehbaz Sharif has warned that businesses collecting sales tax from consumers but withholding the amount instead of depositing it in the government exchequer will not be entitled to any concession. Chairing a meeting to review Federal Board of Revenue (FBR) reforms, he has set December 31, 2026, as the deadline for completing and fully operationalizing production monitoring systems across all manufacturing sectors. He also directed the removal of obstacles to installing automated systems and stressed the need to make camera-based production monitoring more effective under the faceless taxation system.
The Premier has repeatedly highlighted the issue of tax evasion and the need to strengthen revenue collection and rightly so. Businesses that collect sales tax from consumers but fail to deposit it with the government deserve no concession. Such conduct is not merely a violation of tax regulations; it amounts to a serious breach of public trust and, where the money is deliberately withheld, is tantamount to fraud. Strict action must be taken against those responsible, irrespective of their influence or standing. The practice is particularly regrettable because the burden ultimately falls on ordinary citizens. Consumers pay sales tax on goods and services, including meals at food outlets, believing that the amount collected will be transferred to the national exchequer. Yet some businesses reportedly retain these funds instead of fulfilling their legal obligations. This is unacceptable.
The government must ensure that every rupee collected in the name of sales tax reaches the public treasury. Regular audits, effective monitoring and swift penalties are essential to prevent such abuse. Equally important is the timely operationalization of production monitoring systems across all manufacturing sectors. The given deadline must be treated as a firm commitment rather than another administrative target that can be postponed. Automated monitoring, digital records, camera-based surveillance and data-driven audits can help identify discrepancies between actual production, declared sales and taxes paid. These measures would also reduce human interference and opportunities for corruption. We cannot continue to rely on borrowing and indirect taxation while substantial revenues escape collection. Broadening the tax base, enforcing existing laws and eliminating leakages are indispensable to fiscal stability.