UK-backed AI system boosts tax compliance

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A new AI-powered system, developed with UK support, is now monitoring production at all 27 cement factories in Pakistan. The Digital Eye system uses advanced video analytics to track output in real time, offering a transparent and independent record of production. This helps the Federal Board of Revenue (FBR) improve tax compliance and boost revenue collection for public services.

How the system works

The Digital Eye system is designed to work alongside the FBR’s existing Track and Trace System, which records products leaving factories. It adds a layer of oversight by monitoring production lines directly, allowing for cross-checking and greater confidence in reported output. You can see how this real-time data helps authorities verify production levels without relying on manual processes.

Key features of the system

  • Real-time video analytics for production tracking
  • Independent verification of output data
  • Integration with existing tax compliance tools
  • Scalable for use in other industries

Pakistan’s path to better tax compliance

The system was first piloted in 2023 and has since been rolled out nationwide. It’s a direct result of collaboration between a Pakistani company and UK technical support. You can see how this partnership helped build a system that’s both locally developed and globally informed.

British High Commissioner Jane Marriott visited a cement factory in Islamabad to see the system in action. She praised the initiative, calling it a strong example of how international collaboration can drive real change. The system is now operated nationwide by the FBR, showing how innovation can be scaled to improve tax compliance and transparency.

Results so far

Dr. Najeeb Ullah, Chief Reforms and Modernization at the FBR, said the results speak for themselves. He noted that real-time production monitoring has already strengthened compliance in both cement and sugar sectors without adding burdens to honest taxpayers. The FBR is now focusing on refining the system, building internal expertise, and expanding it to other industries.

This approach ensures that the system is not just a one-time solution but a long-term strategy for improving tax compliance. You can see how building local capacity is key to maintaining and expanding the system over time.

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What’s next for AI in tax compliance?

The success of the Digital Eye system could serve as a blueprint for other sectors. It raises important questions about how effectively AI can be integrated into existing bureaucratic frameworks without causing disruption.

The system is not just a tool for compliance—it’s a step toward building a more transparent and efficient tax administration. It reduces reliance on manual processes, cuts down on paperwork, and provides a reliable data source for both tax authorities and businesses.

As the system expands, it will be interesting to see how other countries respond. The experience of Pakistan shows that AI can play a major role in modernizing tax compliance, and other nations may follow suit.

Looking ahead

Practitioners in the field of tax administration and AI development see this as a significant milestone. It shows that with the right partnerships, emerging technologies can be harnessed to tackle long-standing challenges in governance and revenue collection.

The system’s rollout also underscores the importance of building local capacity. The FBR is not just using a tool—it’s developing the skills and infrastructure to maintain and improve it over time. This ensures that the system remains effective and adaptable as needs change.

So, is this a sign of things to come? It’s hard to say for sure. But one thing is clear: the Digital Eye system has already made a tangible impact, and its influence may extend far beyond the cement industry.