Islamabad, September 17, 2025 — The Federal Tax Ombudsman (FTO) has issued a sharp rebuke to the Federal Board of Revenue (FBR) for its failure to address a longstanding complaint and its resistance to supporting local industry innovations, labeling the tax authority’s inaction as maladministration.
The complaint, lodged in January 2020 by the Pakistan Polypropylene Woven Sack Association, accused the FBR of ignoring proposals to integrate these bags into its Track and Trace system. Despite repeated follow-ups in March 2021, April 2022, April 2023, and January 2025, the FBR has not responded, prompting the FTO to intervene. The Ombudsman’s ruling, signed by Dr. Asif Mahmood Jah on September 3, 2025, cited negligence under Section 2(3)(ii) of the FTO Ordinance.
The complainant highlighted critical flaws in the FBR’s current Track and Trace system, including a malfunctioning Auto Applicator in the sugar industry and the susceptibility of the Unique Identification Marking (UIM) to counterfeiting. The proposed QR-coded polypropylene bags were presented as a secure, locally developed alternative to enhance tax compliance in sectors like sugar, cement, and fertilizer. The complainant also pointed out that many unregistered polypropylene bag manufacturing units contribute to widespread sales tax evasion, a concern the FTO deemed legitimate.
FBR officials, however, defended their existing system, claiming it is “efficient and secure” for products like cigarettes and cement. They argued that adopting QR-coded bags is unnecessary and cited their Solution Delivery Agreement (SDA) with a foreign licensee, valid until March 2026, as a reason to maintain the status quo. Industry representatives criticized this stance, accusing the FBR of favoring imported solutions over domestic innovations, thereby undermining Pakistani manufacturers.
The FTO’s findings emphasized the need to patronize local industries to boost economic growth and curb tax evasion. It noted that unregistered polypropylene bag manufacturers facilitate significant revenue losses
