FBR Mandates Electronic Monitoring for Tyre Makers
The Federal Board of Revenue (FBR) has issued a new order requiring all registered tyre manufacturers in Pakistan to install electronic monitoring systems by November 30, 2026. This move aims to ensure real-time tracking of tyre production and enhance tax compliance within the industry.
Details of the Electronic Monitoring Directive
Under the directive issued on October 30 through Sales Tax General Order No. 32 of 2026, tyre manufacturers producing tyres for cars, motorcycles, trucks, and other vehicles must implement electronic equipment at their production facilities. This technology will automatically record data such as tyre quantities manufactured, size, tread pattern, weight, and distinguish between finished and incomplete products. The system also detects production halts or tampering attempts and sends the collected information directly to the FBR.
ISSM Labelling Solutions (Pvt) Ltd has been authorized by the FBR to supply the required monitoring technology. All costs related to installation, electricity, and internet connectivity will be borne by the manufacturers themselves. Additionally, tyres cannot be removed from factory premises unless production is duly recorded by the system.
Impact on Tyre Industry and Tax Compliance
Nine major tyre makers have been initially identified for the rollout, including Ghandhara Tyre, Long March Tyres, Panther Tyres, Diamond Tyres, Service Industries Ltd, Ghauri Tyre and Tube, Crown Tyres, United Rubber, and Service Tyres (Pvt) Ltd. However, the FBR emphasizes that all registered manufacturers must comply regardless of this initial list.
The move is part of a broader FBR initiative to address a significant gap of approximately Rs 3.7 trillion between potential and actual sales tax collections. By improving accuracy in monitoring production, the authority aims to curb tax evasion. Similar electronic tracking measures are also being introduced in other sectors such as textiles, packaged beverages, edible oil, paper, and household electronics.
What It Means for Pakistani Consumers
While manufacturers will incur additional expenses related to the electronic monitoring system and its ongoing operation, the immediate effect on tyre prices remains uncertain. Whether these increased costs will be absorbed by the producers or passed on to consumers is yet to be seen. Given Pakistan’s expanding automotive market and reliance on local tyre manufacturing, this directive could have broader implications for vehicle owners nationwide.
By introducing this real-time tracking and reporting mechanism, the FBR is aiming to foster transparency in the tyre manufacturing sector, potentially improving tax revenues and industry standards over time.
