FBR intensifies enforcement against textile spinning units refusing to install "digital eye" video analytics system

The Federal Board of Revenue (FBR) is ramping up enforcement actions against textile spinning units that refuse to install video analytics, also known as the "digital eye" system, in their operations. 

Approximately 300 of the 421 registered spinning units in Pakistan are operational and will be required to install these systems to monitor the movement of undocumented cotton bales.

Business Recorder reported, citing sources, that the FBR will implement severe penalties, including import embargoes, business premises sealing, suspension of sales tax registration, blacklisting, and production suspensions for non-compliant units.

The tax authority has directed all its field formations to take strict action to ensure that video monitoring systems are fully implemented at textile spinning units. 

The decision to enforce video analytics systems was initially made with a deadline of November 1, 2025. However, this deadline was extended to December 31, 2025, but has since expired. The FBR is now pushing forward with the implementation of the systems regardless of resistance from spinning units. 

The FBR has assured textile spinning units that they will receive a tax credit for the expenses incurred in installing the video monitoring systems, and a joint committee has been established to monitor the process. 

The FBR’s main goal is to capture the movement of "Gol Maal," a term used locally to describe cotton bales consumed without payment of sales tax. Textile units consume around 13 million cotton bales annually, with only 9 million bales falling under the tax net. The remaining 4-5 million bales are either locally consumed without taxes or imported.

Earlier, the All Pakistan Textile Mills Association (APTMA) opposed the installation of the video analytics systems at the spinning stage, but despite their objections and a legal challenge, the Lahore High Court did not grant a stay on the implementation.