Pakistan’s tax authority has issued a warning to Chinese companies operating in the country, instructing them to allow the installation of AI-enabled monitoring cameras at production lines or halt their operations. Federal Board of Revenue (FBR) Chairman Rashid Langrial made the announcement during a Senate Standing Committee on Finance session, responding to claims from representatives of four Chinese firms who opposed camera installation. The FBR estimates that tile manufacturers underreport production, resulting in annual tax losses of around Rs30 billion.
Langrial explained that the AI cameras would be installed to monitor output at all ceramic factories, whether locally or foreign-owned, and stressed that the system was designed to capture production data without compromising trade secrets. The FBR has already reduced the number of cameras from 16 to five per factory to address investor concerns, placing them only in areas necessary to accurately monitor output. Representatives of the Chinese companies argued that monitoring could expose business-sensitive information, citing practices in other countries such as Saudi Arabia where such measures are not used. Langrial rejected these arguments, emphasizing that accurate production reporting was essential and non-compliance could result in factories being asked to suspend operations.
State Minister for Finance Bilal Azhar Kayani highlighted that the AI monitoring system benefits factory owners by eliminating the need for FBR officials to be physically present, with video analytics counting production remotely. He noted that the reduction in cameras demonstrated the government’s willingness to consider business concerns, while ensuring full payment of sales tax. Langrial also pointed out that the decision to install cameras was prompted by complaints from the Pakistan Tiles Manufacturers Association regarding underreporting by competitors. Similar systems in sugar and cement sectors are expected to generate Rs76 billion and Rs102 billion, respectively, in additional revenue during the current fiscal year.
During the session, the Senate committee also addressed unrelated issues, instructing SBP to review dress code policies at certain commercial banks that require female employees to wear abayas. Senators Dr. Zarqa Taimur and Farooq Naek raised objections, stating that existing modest dress standards were sufficient and additional requirements were unnecessary. The committee decided to summon the banks in question for clarification. Concerns were also raised about Islamic banking institutions allegedly charging higher profit rates than conventional banks, with members describing the practice as deceptive and requiring regulatory scrutiny.
This move signals a broader push by Pakistan’s government to ensure compliance, transparency, and accountability across high-risk industrial sectors, leveraging technology such as AI to monitor production and curb revenue leakages while maintaining investor engagement.
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