- Tax collection sees 54% an increase despite stable sugar sales volumes.
- The sugar industry in Pakistan has an important political influence.
- The authorities intensify the repression of tax evasion in the sugar industry.
Islamabad: there has been massive tax evasion in the sugar sector, as the newly implemented monitoring and application system for the sugar sector increased the tax collections by 54%.
Official sources have said that the sales tax being collected on sugar sales, 24 billion rupees were collected in January and February 2025, against 15 billion rupees during the same period last year – an increase of 54% despite stable sugar sales volumes.
The sugar industry in Pakistan has a significant political influence, in particular in Punjab and Sindh, where several high -level politicians, including members of the Sharif family in power, have sweets.
The sources have indicated that the PM Shehbaz Sharif personally examines on a weekly basis of the repression of the FBR against tax evasion in the sugar sector. Apparent response to the action of FBR, the sugar cartel would have increased the price of sugar on the free market.
In response to this decision of the Sugar cartel, said a source and a federal minister confirmed that the Prime Minister had ordered the ministries concerned to consider importing raw sugar from abroad if the sugar thousands do not behave.
The authorities have intensified their repression of tax evasion in the sugar industry, confiscating more than 100,000 empty bags carrying track stamps and trace during the current crushing season. This fraud would have been designed to manipulate production files and escape taxes.
According to sources, ten falls / hoppers of six sugar factories were sealed in the context of recent application measures. Two of these hoppers, which were not linked to the official surveillance system, were first sealed and dismantled later.
As part of the latest law application actions relating to the sugar industry, an operation combined by the Federal Board of Revenue (FBR) Inland Revenue Network (IREN) and the Intelligence Bureau (IB) led to the seizure of 52,410 bags of sugar. These were then released after the resumption of penalties greater than RS125 million, in addition to the sales tax payable on the sale of sugar.
In addition, the authorities claimed to have placed an embargo on the Godowns of three sugar factories to recover 700 million rupees in sales tax contribution. A total recovery of more than 2 billion rupees was also made from previous tax periods.
Meanwhile, total sugar production for the current season has reached 5.7 million metric tonnes. When combined with the actions of last year, according to sources, this is considered sufficient to meet the country’s sugar demand for the season.
Following a directive by Prime Minister Shehbaz Sharif, the FBR launched an improved production monitoring system at the start of the crushing season of 2024-25. Currently, five surveillance mechanisms are in place to slow down tax evasion:
- Follow and trace stamps to monitor production.
- Automated meters at Hoppers to follow the number of product bags.
- Video recording and digital eyes counting for real -time verification.
- S-track billing system to monitor sugar dispatches.
- FBR staff on site supervise manufacturing and sales.
The Federal Investigation Agency (FIA) and the Intelligence Office (IB) also monitors operations to ensure transparency, said a source, adding: “To prevent collusion, FBR officers stationed in Mills are filmed every ten days, while monitoring video surveillance and surprise inspections by senior officials tighten more surveillance.
The authorities also study if sugar is sold to authentic or hobby distributors for price handling. The application network now monitors the entire supply chain to prevent any form of tax evasion or storage.
This ongoing repression indicates the government’s intention to limit financial misconduct in the sugar industry
Originally published in The news