FBR to Start Electronic Monitoring of Textile Spinning Units from November 2025
Federal Board of Revenue (FBR) has made it official that video analytics systems will be used to keep an electronic eye on textile spinning units’ production processes from November 1, 2025. The move is in line with FBR’s ongoing initiative of stopping tax evasions and maintaining transparency within the textile industry, which happens to be one of the country’s key industrial industries.
Implication for the Textile Industry
The producing units of textile mills and registered persons operating spinning units will be monitored online real-time in the new system. Production levels will be monitored, reported data verified, and tax remittances reconciled against production for such purposes.
The selection has been formally made by S.R.O. 1963(I)/2025, issued under Section 50 and Section 40C of the Sales Tax Act, 1990, in accordance with Rule 150ZQR of Chapter XIV-BA of the Sales Tax Rules, 2006.
Why FBR Introduced This System
For years, the textile industry — which is a major contributor to Pakistan’s export revenues — has been under scrutiny for factors like under-reporting of production and uneven sales documentation.
By implementing electronic monitoring, FBR hopes to:
• Help report accurately production and sales,
• Stop leakages of taxes and misreporting, and
• Enhance transparency and compliance across the board.
One FBR official said that this move is not intended to burden the manufacturers but to establish a just and open environment where honest taxpayers are identified and rewarded for complying.
How the Monitoring Will Work
The system will be equipped with video analytics technology deployed at registered textile spinning units. These cameras and sensors will track production activities and transmit real-time information to FBR’s central monitoring system.
This digital environment will enable the FBR to verify production statistics against sales tax returns — ensuring that each meter of yarn or fabric actually produced is recorded correctly in tax returns.
FBR officials have clarified that the monitoring will only cover production-related areas and not interfere with workers’ privacy or unrelated operations.
Implementation Timeline
The new system will officially go live on November 1, 2025. Textile units who are registered under sales tax will have to verify that their monitoring equipment is installed and integrated into the FBR system properly prior to this date.
FBR is also offering textile manufacturers technical advice and orientation sessions to promote information exchange.
A Giant Step for Electronic Tax Administration
This aligns with FBR’s general pursuit of automation and digitization, some of the recent initiatives of which are enumerated below:
The AI Chat Assistant was introduced to assist taxpayers, the Point of Sale (POS) integration system was upgraded, and real-time sales and production report automation is planned to be done.
Each of these steps aims at increasing the efficiency, transparency, and technology backbone of the tax administration of Pakistan and reducing the extent of human intervention and manipulation scope.
What’s Next for Companies
Textile units must begin making preparations for integration with the system by:
- Ensuring that their production areas can support monitoring equipment,
- Coordinating with FBR-approved vendors for installation and setup, and
- Training staff to manage compliance with the new requirements.
When the system goes live, early planning will help prevent fines or interruptions.
Concluding remarks
One key measure towards Pakistan’s move towards smart tax enforcement is the introduction of electronic monitoring for textile units.
Although the manufacturers will have to make some changes initially, the long-term benefits—greater fairness in taxation, improved documentation, and a more positive export reputation—far exceed the immediate challenges.
This system can be used as a model for digital compliance in other industries if it is done properly.