PM launches first-ever AI-powered customs clearance, RSM
In a high-profile meeting chaired by the prime minister to review ongoing Federal Board of Revenue (FBR) reforms, officials revealed the new system leverages AI and automated bots to estimate the cost and nature of goods during imports and exports – a first for Pakistan's trade sector.
During a briefing to the prime minister, FBR officials claimed that this marks a historic leap, moving Pakistan's customs operations firmly into the digital age for the first time.
The early tests of the AI-driven RMS have been nothing short of spectacular, the meeting was told, with the system showing a 92 per cent improvement in overall performance, while goods declarations flagged for tax collection increased by 83 per cent.
Even more impressively, they added, clearance through the 'green channel' – the fast-track lane for low-risk shipments – has increased by 2.5 times, promising major time savings for traders.
The system's brain, according to the FBR, comprises cutting-edge machine learning algorithms that continuously evolve by analysing the movement of goods in real time, significantly reducing the need for human intervention and its commonly associated inefficiencies.
In his remarks, Prime Minister Sharif hailed the reform as one of the government's top priorities to 'automate the tax system, making it more transparent and effective.'
He emphasised that the new tech-powered framework will simplify doing business in Pakistan and provide much-needed relief to taxpayers burdened by bureaucracy.
'Less human intervention means less corruption, quicker clearances, and more money in the government's coffers,' he noted, urging officials to ensure the system is integrated and sustainable for the long term.
Sharif also applauded the FBR team for their efforts in developing the system, stressing that Pakistan must keep pace with global standards to attract investment and bolster economic growth.
The meeting also highlighted a parallel breakthrough – a video analytics-based tool designed to improve tax collection in Pakistan's manufacturing sector. This technology promises to automate tax assessments transparently and efficiently, removing room for human error or manipulation.
Tested with a reported 98 per cent accuracy rate, the system is poised to significantly boost government revenue and ease compliance for businesses – a major step forward for Pakistan's fiscal health.
Finance Minister Muhammad Aurangzeb, Information Minister Attaullah Tarar, the FBR chairman Rashid Mehmood Langrial, and other senior officials attended the meeting, collectively pledging full support for these transformative initiatives.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
2 hours ago
- Express Tribune
PIA incurs net loss of Rs4.6 billion
Listen to article The finance ministry has disclosed in a report that Pakistan International Airlines (PIA) last year incurred a net loss of Rs4.6 billion and one-off accounting profit of Rs26 billion due to treating past losses as future assets "should not be misinterpreted as a sign of operational profitability". The biannual report on federal state-owned enterprises (SOEs) has again highlighted the inefficiencies of PIA, though it has been freed from legacy debt and liabilities. The Central Monitoring Unit (CMU) of the Ministry of Finance released the report on Friday, which gave an in-depth understanding of the accounts of PIA Corporation Limited (PIACL) after its restructuring in which Rs660 billion worth of debt was taken out of the company books. "Despite the overhaul, PIACL Core still reported a pre-tax loss of Rs4.6 billion for the full year and Rs2.3 billion over six months," said the Ministry of Finance. Three months ago, every high-up from Defence Minister Khawaja Asif to Prime Minister Shehbaz Sharif showed satisfaction with PIA's profit of Rs26 billion without knowing that it was a mere "accounting profit". The finance ministry's report stated that a one-off deferred tax asset (DTA) recognition of approximately Rs30 billion was booked as part of the restructuring. While this resulted in an "accounting profit", it is important to recognise that this is a non-cash adjustment, stated the ministry while correcting the record. The report stated "excluding the DTA, the airline's net loss before tax stands at Rs4.58 billion for 12 months," ending December. This DTA reflects the company's expectation of future taxable profits, which is itself a vote of confidence in the potential recovery path, but it should not be misinterpreted as a sign of operational profitability, said the ministry. "The CMU has, therefore, highlighted this so that future valuations consider these items". Accounting rules permit the DTA recognition where sufficient future taxable profits are probable, enabling to offset the accumulated tax losses. "The deferred tax asset of Rs30 billion represents a future tax shield and should not be considered part of core profitability," said CMU Director General Majid Soofi. But the CMU has plainly said that "the profit figures are essentially impacted by deferred tax reversals, impacting the effective tax rate and earnings quality". The report stated that a significant outcome of the restructuring was the dramatic reduction in long-term financing liabilities, from over Rs295 billion to just Rs13 billion, including lease obligations. Consequently, the finance cost plunged from Rs79 billion to Rs10 billion. The cost of services remains elevated and total operational costs reached Rs106.6 billion. "To mitigate these pressures, PIACL must aggressively pursue fleet modernisation, enter fuel hedging contracts and renegotiate existing supply agreements," the CMU recommended. It added that Rs8.3 billion in administrative cost and another Rs8.2 billion in distribution cost were high. PIACL also incurred exchange losses of Rs2.3 billion, reflecting unhedged exposure to foreign currencies that is a structural vulnerability for any international airline. The finance ministry said that following delisting from the Pakistan Stock Exchange and full government ownership of PIA via Holding Company, PIACL "is now free from short-term market pressures". But it said that a performance-based human resources model must be introduced, along with international productivity benchmarks and merit-based promotions. The ministry stated that PIA and Pakistan Telecommunication Company Limited (PTCL) also posed major risks. PIA's heavy debt despite debt being carved out increases insolvency risks, requiring urgent restructuring and potential strategic partnerships. "Rapid privatisation should be ensured," it said. After the failure of the first attempt, for the second attempt to privatise PIA, the Privatisation Commission has pre-qualified four parties and three of them are cement makers. The finance ministry said that PIA and PTCL face market pressures and operational inefficiencies. Debt restructuring, operational improvements and reduced leverage through asset sales are key measures to regain financial health and reduce their dependence on the government, it recommended. PIA is among the entities that face undue interference. It has also been placed among the entities that have low compliance with the SOEs Act, falling even below 60% threshold. To address these challenges, strategic mandates of SOEs must be clearly recalibrated and aligned with national economic goals and fiscal discipline. Long-term business plans that incorporate measurable stakeholder-aligned objectives must be institutionalised, particularly for high loss-making entities like power distribution companies, Railways, and PIA, stated the report. It added that the restructuring of PIACL marks a turning point in the airline's decades-long struggle with debt and inefficiency. Through the successful implementation of the Scheme of Arrangement (SOA), the airline has shed legacy debt and non-core assets, emerging as a streamlined, aviation-focused entity. This strategic realignment allows the company to shift from financial firefighting to operational revitalisation. The government has parked Rs660 billion worth of PIA debt in a new holding company along with non-core real estate assets, which substantially cleaned up the balance sheet. With this separation, PIACL now operates as a focused airline business, while PIA Holding Company takes on the responsibility of settling historical obligations through budgetary support and asset monetisation. This structure enables clearer financial reporting and makes future privatisation or partnerships more feasible. Post-restructuring, PIACL's total assets are recorded at Rs187 billion after accounting adjustments. The company's current liabilities have declined from Rs482 billion to Rs142 billion and non-current liabilities from Rs366 billion to Rs41 billion. These carve-outs have eliminated the suffocating debt overhang and improved solvency metrics, offering much-needed breathing space for strategic decision-making, according to the report.
Business Recorder
3 hours ago
- Business Recorder
Finance Act 2025: Auto industry grapples with enforcement challenges
ISLAMABAD: The auto industry is confused to deal with the enforcement of the Finance Act 2025 which has restricted ineligible persons from booking or purchasing motor vehicles from July 1, 2025. The Federal Board of Revenue (FBR) Member Inland Revenue (Policy) has received a letter from Pakistan Automotive Manufactures Association (PAMA) seeking clarification on bar on Booking and Purchase of Motor Vehicles under the Finance Act 2025. According to the PAMA, refer to the subject matter regarding the enforcement of the new law under the Finance Act 2025, which restricts ineligible persons from booking or purchasing a motor vehicle. The law further mandates that any motor vehicle booked or purchased by such persons shall not be registered by the relevant authorities. In this regard, we request clarifications to facilitate the smooth transition and effective implementation of the new law: 'Localization transforming Pakistan's automotive industry' a) The process for determining eligibility remains unclear. Since the restriction applies at the booking stage—the initial step towards vehicle purchase—it implies that every prospective buyer must first obtain an eligibility certificate or similar approval from the competent authority before proceeding. b) As the eligibility certificate will be a crucial document, we request that the issuance mechanism be defined promptly to avoid delays in motor vehicles bookings. It is suggested that FBR consider developing an eligibility portal similar the filers portal. c) The definition of an eligible person under the Income Tax Law applies to individuals, companies, and associations of persons. This condition should not apply to purchases made by the Federal Government, Provincial Government, Local Government, Armed Forces and their related departments, Organisations, authorities, etc. As the new law has already come into effect from July 1, 2025, we anticipate delays in operational clarity. In the interim, we urge the government to consider allowing temporary bookings for waiting customers until requisite clarifications are issued. The association referred to section 114C (Restriction on economic transactions by certain persons), Notwithstanding anything contained in any law for the time being in force, —(a) any application, by any ineligible person, for booking, purchase or registration of a motor vehicle of the value exceeding the threshold given in Fifteenth Schedule, shall not be accepted or processed by any manufacturer of a motor vehicle or vehicle registering authority of Excise and Taxation Department, as the case may be, the new section in the Income Tax Ordinance 2001 stated. The FBR's early attention and action to this matter will be highly appreciated, it added. Copyright Business Recorder, 2025
Business Recorder
3 hours ago
- Business Recorder
PM paints bright picture of ‘economic rescue'
ISLAMABAD: Prime Minister Shehbaz Sharif on Saturday credited his government's effective measures for stabilising the economy, citing a sharp fall in inflation and interest rates, as well as a crucial agreement with the International Monetary Fund (IMF) that helped Pakistan avert default. Speaking to students of the Uraan Pakistan Summer Scholars Internship Programme, Sharif painted a picture of economic rescue under his leadership, claiming the country had dodged financial collapse through team work and tough reforms. 'When we took over, inflation was exploding at 38% and the policy rate had hit a punishing 22%. Today, it's down to 11%. We did not just make policies, we worked day and night and left the rest to Allah,' he added. Pakistan's tax-to-GDP ratio lags due to narrow tax net, informal economy: ADB The prime minister said 2023 had brought Pakistan to the brink of default, but his administration pushed through reforms and sealed IMF agreements that stabilised the economy. 'Most thought we'd go bankrupt. I knew we wouldn't,' he said, adding that 'Pakistan has come out of the risk of default.' Sharif did not hold back from criticising what he called a deeply entrenched culture of favouritism and influence-peddling. 'Recommendations start pouring in even before real reform begins,' he said. 'But we were ready. Officers from grades 20 to 22 were shown the door despite pressure from all over the country.' Taking a shot at corrupt practices, he warned, 'Those who lie by swearing on Allah and the Prophet should repent.' He pointed to major reforms at the Federal Board of Revenue (FBR) as proof of his administration's commitment to clean governance. 'Sharp bureaucrats used to game the system. We changed that. Now digitisation and faceless tech are in place and the FBR has collected Rs500 billion through enforcement.' While touting his government's work, Sharif struck a moral tone. 'Allah will ask me what I did in this world and I'll say I worked on merit,' he said, vowing to continue what he called a 'journey full of obstacles.' He praised Pakistan's youth as the backbone of the country's future and said the laptop distribution scheme in Punjab – worth Rs20 billion – was entirely merit-based. 'The future lies with this galaxy of young superstars,' he said. Sharif also took aim at India, referencing the Pahalgam incident and cross-border hostilities. 'Pakistan had no role in that incident, but India used it as an excuse for aggression, killing 55 innocent civilians. We defended ourselves and shot down six enemy aircraft. On May 10, we hit back and it was a strong, united response.' Sharif said Pakistan had offered to support an impartial international investigation, but insisted Islamabad would never shy away from defending its sovereignty. Despite the defiant tone, Sharif said he was not seeking personal accolades. 'I have never taken credit – it has always been about teamwork. We must achieve our goals, or we will face the consequences.' Copyright Business Recorder, 2025
