FBR Clarifies Procedure to Seal Businesses Not Linked to Electronic Monitoring System

The Federal Board of Revenue (FBR) has clarified the procedure for taking action against registered businesses that fail to connect with the required electronic monitoring systems. Under the new mechanism, business premises that do not comply with the prescribed monitoring, video surveillance, or Digital Eye systems may be sealed after completion of the legal process.

According to the FBR, the process will begin with a written report from an Assistant Commissioner or an officer of a higher rank. The report will lead to an inquiry by the Commissioner Inland Revenue. After completing the inquiry, the Commissioner will submit the findings to the Chief Commissioner.

FBR Clarifies Procedure to Seal Businesses Not Linked to Electronic Monitoring System

The Chief Commissioner will then issue a written order on whether the business premises should be sealed. The authorities can seal the entire premises or a specific portion, depending on the circumstances of the case.

Before sealing the premises, the concerned business owner or person must receive a copy of the sealing order. The FBR may also seek assistance from the police if required during the enforcement process.

A sealed business will remain closed until its required monitoring system is successfully connected with the FBR’s system. To reopen the premises, the business will have to pay the prescribed penalty and install the required monitoring system.

The FBR will also ensure technical support during the installation process. Its technical team will be present when the monitoring system is installed and integrated with the tax authority’s system.

Once the installation and integration process is completed, the Commissioner Inland Revenue will issue a certificate within three days confirming compliance. This certificate will allow the business to proceed with the process of reopening its premises, subject to the applicable requirements.

See Also: FBR Simplifies Income Tax Return Filing for Tax Year 2026

The FBR has already introduced electronic production monitoring, video analytics and Digital Eye systems in several sectors. These include tiles, sugar, bottled water, packaged milk and other specified industries.

The tax authority has been expanding the use of digital monitoring tools to improve oversight of production and business activities. The latest procedure provides a formal enforcement mechanism for businesses that fail to comply with the monitoring requirements.

The FBR has also indicated that the electronic monitoring framework could be extended to more businesses and manufacturers in the future. This means additional sectors may be brought under the monitoring system as the tax authority expands its digital oversight mechanisms.