AI powered monitoring system now watches all 27 Pakistani cement plants for tax compliance

Pakistan’s Federal Board of Revenue has expanded an artificial intelligence powered monitoring system called Digital Eye to cover all 27 cement factories nationwide, strengthening the tax authority’s ability to track production and curb underreporting across the sector.

The system, first piloted in 2023, uses video analytics to monitor production lines continuously, giving both factory operators and tax officials an independent, real time record of output. Digital Eye works alongside the FBR’s existing Track and Trace System, which records products as they leave the production line, allowing the two systems to be cross checked against each other and giving authorities greater confidence in reported production figures. Officials say the combination reduces the FBR’s reliance on manual inspections and paperwork, which have historically left more room for underreporting and revenue leakage.

British High Commissioner Jane Marriott visited Fecto Cement, one of the plants using the system, alongside senior FBR officials to observe the technology firsthand. During the visit, the group toured the production line and received a briefing on how the monitoring system supports Pakistan’s broader tax administration reforms. Marriott described Digital Eye as a strong example of practical cooperation between Britain and Pakistan, noting that the system was built domestically and is now operated nationwide by the FBR. She said the project demonstrates how homegrown innovation can be scaled to strengthen tax compliance, support fair competition among businesses and improve overall transparency. She added that Britain takes pride in having supported the system’s development through technical expertise while helping build the institutional capacity needed to sustain it going forward.

Dr Najeeb Ullah, the FBR’s Chief of Reforms and Modernisation, said real time production monitoring has already strengthened compliance in both the cement and sugar sectors without placing additional burden on businesses that already report honestly. He said the results speak for themselves and that the FBR’s current focus is on consolidating the systems already built, improving their accuracy, deepening staff expertise, and extending similar monitoring to additional sectors. Ullah credited British support delivered through the REMIT programme for helping build the system and said the FBR intends to carry the same approach into further industries.

According to the FBR, the solution was developed entirely by a Pakistani technology company before being tested, refined and rolled out nationwide with British technical assistance, an approach officials describe as evidence that domestic innovation can be scaled through international partnership to deliver reforms at a national level. The FBR said the technology and the broader reform program built around it have also drawn interest from several African countries examining Pakistan’s experience as a potential model for modernizing their own tax compliance systems.

Officials tied the monitoring push to concrete revenue gains, reporting that wider compliance reforms have helped recover 32 billion rupees from the cement sector and increased recorded sugar production by 31 percent during the most recent crushing season. The FBR noted these results reflect a combination of policy and compliance measures, of which Digital Eye represents only one component, rather than crediting the AI system alone for the improved figures.

The expansion adds to a broader pattern of digital tax enforcement tools Pakistan has rolled out in recent years as authorities work to close persistent gaps between actual industrial output and what gets formally declared for tax purposes, gaps that have long constrained government revenue collection in sectors prone to underreporting.