FBR has sealed two production chutes at Safina Sugar Mills for Track and Trace violations, tightening digital monitoring to curb tax evasion in the 2025–26 crushing season.
Safina Sugar Mills Units Sealed for Track and Trace Violations
The Federal Board of Revenue (FBR) has intensified its enforcement drive in the sugar sector by sealing two production chutes at Safina Sugar Mills in Chiniot. The action was taken at the mill’s Laliyan unit after officials found that the chutes were operating without the mandatory digital monitoring equipment required under the Track and Trace system.
According to the FBR spokesperson, the production lines were running without digital eye cameras and network video recording systems. This is a clear violation of Track and Trace requirements laid down under the Sales Tax Rules 2006, which now make it compulsory for sugar mills to combine physical production with real-time digital reporting.
The enforcement step follows clear directives from Prime Minister Muhammad Shehbaz Sharif at the start of the 2025–26 sugarcane crushing season. The government has repeatedly signalled that it will not tolerate tax evasion, under-reporting of production or manipulation of sugar stocks in a sector that has been the focus of public and regulatory scrutiny for years.
Digital Monitoring Tightened Across the Sugar Supply Chain
FBR has rolled out a comprehensive digital monitoring regime across the country’s sugar mills as part of its Track and Trace programme. The system is designed to capture production data at multiple points so that declared output matches actual manufacturing on the ground.
Key components of the framework include Track and Trace stamps, automated hopper counters, continuous video recording, digital eye counting and S Track invoicing at mill out gates. Together, these tools are meant to close loopholes that previously allowed some mills to under-report production, delay issuance of invoices or divert goods off the books.
By combining physical seals, machine counters and digital cameras, FBR can now match the number of sugar bags leaving a factory with data recorded in its systems. Any mismatch or attempt to bypass the system, such as operating unregistered chutes without cameras, can trigger immediate enforcement action like sealing, fines or further investigation.
Round-the-Clock Oversight to Curb Tax Evasion
The enhanced framework goes beyond technology alone. FBR has also deployed its own staff inside sugar mills to monitor operations in real time. These teams are supported by 24/7 CCTV surveillance, regular visits by senior officers and checks conducted by the Inland Revenue Enforcement Network (IREN).
This multi-layered oversight model is designed to make it difficult for any production to take place off the record. If a mill attempts to run a line without approved cameras or tries to shut down monitoring equipment, FBR teams and remote control rooms can detect anomalies quickly. The sealing of the Safina Sugar Mills chutes is being presented as a clear message that non-compliance will carry immediate and visible consequences.
Officials argue that such strict enforcement is necessary because the sugar sector has, in the past, been used to hide taxable income, manipulate inventories and distort prices. By tightening real-time monitoring, the authorities hope to close long-standing gaps between reported and actual production.
Protecting Revenue and Ensuring Sugar Availability
FBR has stressed that the primary objective of the strengthened monitoring system is to safeguard national revenue and protect consumers. When sugar production is fully documented, it becomes harder for unscrupulous players to create artificial shortages, hoard stock or evade taxes by moving product through unrecorded channels.
The authority has also highlighted that accurate production data is crucial for planning and ensuring that enough sugar remains available in the market even after the crushing season ends. Transparent monitoring allows regulators to see how much sugar is being produced, how much is being released into the market and where potential bottlenecks or irregularities may be arising.
FBR has made it clear that it will maintain close oversight throughout the 2025–26 crushing season. Mills that fail to meet Track and Trace standards or attempt to circumvent digital controls risk facing enforcement measures similar to those imposed on Safina Sugar Mills. For compliant mills, however, the system offers a chance to operate on a more level playing field, with honest taxpayers no longer undercut by competitors who evade their obligations.
