Islamabad is betting that cameras—not audits—will shrink the cotton black economy that distorts the yarn trade.
Pakistan’s Federal Board of Revenue (FBR) is preparing enforcement action against textile spinning units that have not installed video analytics systems—branded the “digital eye”—to monitor cotton-bale intake and production lines. Officials say around 300 operational units (out of 421 registered) fall under the directive, and that field formations have been instructed to proceed after the December 31st 2025 deadline lapsed.
Non-compliant mills face a menu of coercive measures: import embargoes, sealing of premises, suspension of sales-tax registration, blacklisting, and even production stoppages, according to reporting citing FBR sources. A tax credit is promised to offset installation costs, alongside an FBR–APTMA joint committee meant to troubleshoot implementation.
The target is “gol maal”—cotton bales consumed outside the sales-tax net. Officials estimate mills consume roughly 13m bales annually, with only ~9m documented; the rest are allegedly untaxed local purchases or imports routed through weak points in oversight.
If that gap is real, it is not just a revenue leak: it is a competitive distortion, rewarding mills that under-report inputs and squeezing compliant firms.
APTMA has opposed monitoring at the spinning stage and sought relief in court, but reporting says the Lahore High Court did not grant a stay. With the legal road narrowed, the fight shifts to operations: vendor capacity, uptime, data governance—and whether
