ISLAMABAD – The Federal Board of Revenue (FBR) has informed a parliamentary committee that pervasive smuggling is inflicting a staggering loss of Rs750 billion (approximately US$2.7 billion) on Pakistan’s documented economy, dealing a severe blow to the national exchequer and legitimate businesses.
In a briefing to the National Assembly Standing Committee on Finance on Thursday, FBR officials detailed the extent of the damage caused by illegal trade and outlined a new technology-driven strategy to combat the issue.
FBR Member Customs Operations Shakeel Shah told the committee, chaired by Naveed Qamar, that the smuggling has not only resulted in massive revenue losses but has also disrupted the balance of local markets and promoted a parallel economy. “Due to the ongoing smuggling in the country, Pakistan’s formal and documented economy has suffered a loss of Rs750 billion,” he stated.
To counter this, the FBR is pinning its hopes on the establishment of Digital Enforcement Stations (DES). Member Shah explained that these technology-equipped stations would enable risk-based monitoring and tracking of vehicles and goods using modern systems, helping to prevent duty and tax evasion and promote documentation.
When Committee Chairman Naveed Qamar inquired whether the system would allow for 100 percent monitoring of vehicles, the FBR official clarified that the approach would involve “risk-based random monitoring” rather than tracking all traffic.
The briefing was part of the committee’s deliberations on the FBR’s proposed Public Sector Development Programme (PSDP) for the fiscal year 2026-27, for which an allocation of Rs49.22 billion has been requested.
FBR officials revealed that an additional revenue target of Rs250 billion has been set, linked to the success of the new digital enforcement stations in curbing smuggling and illegal trade.
Shakeel Shah provided insights into recent anti-smuggling efforts, particularly in Balochistan, acknowledging that traditional methods have been hampered by security issues, geographical constraints, and a lack of resources. However, he reported that focused measures in the province have already yielded positive results, generating an additional Rs188 billion in revenue from the petroleum sector alone.
He outlined the new strategy, stating that 25 digital customs stations have already been established in Balochistan, and 10 key check posts have been upgraded.
The FBR also informed the committee of its enhanced legal mandate. Under the Finance Act 2025, the Board now has the authority to declare any location a Digital Enforcement Station or upgrade existing check posts through a notification in the official gazette. The FBR will also be responsible for formulating the rules and regulations governing the staff, operations, and technology of these new stations.
