The Federal Board of Revenue (FBR) has taken strict enforcement action against a major sugar mill for non-compliance with tax monitoring regulations. On January 4, 2026, officials sealed two production chutes at Safina Sugar Mills located in Laliyan, District Chiniot.
Reason for the Enforcement Action
According to an official press statement issued on Sunday, the decisive step was taken due to the mill management's failure to install mandatory surveillance equipment. The management did not fit the required digital eye cameras and NVR systems on the specified chutes. This omission constitutes a clear violation of the track and trace rules outlined in the Sales Tax Rules of 2006.
The FBR has stated that the sealed chutes will remain out of operation until the mill's management complies with the regulations by installing the necessary camera and recording systems.
Enhanced Monitoring in the Sugar Sector
This action is part of a broader, intensified campaign launched by the FBR on the directives of the Prime Minister. Following the start of the 2025-26 sugarcane crushing season, the revenue board has implemented a robust, multi-layered production monitoring system for the sugar industry.
The current oversight mechanism integrates five key systems to prevent tax evasion and ensure transparency:
- Track and Trace Stamps on bags
- Automated Counters at production hoppers
- Comprehensive video recording of operations
- Digital eye counting technology
- The S-Track invoicing system for all dispatches at the mill's out gate
Furthermore, FBR personnel are physically posted at each mill. Their work is supervised through integrated CCTV feeds, frequent visits by senior FBR officers, and random field checks conducted by the Inland Revenue Enforcement Network (IREN).
Zero-Tolerance Policy and Future Actions
The government of Pakistan has reiterated its zero-tolerance policy against tax evasion and non-compliance within the sugar sector. The enforcement network is actively operating across the entire supply chain to verify that sugar is sold to genuine distributors and not to hoarders.
These measures aim to protect government revenue and ensure a regular supply of sugar to end consumers after the recovery of due taxes. The FBR has emphasized that strict monitoring and swift action will continue even after the crushing season concludes to guarantee adherence to the law.
The sealing of chutes at Safina Sugar Mills serves as a strong warning to all industry players about the consequences of flouting tax regulations.
