Chinese companies asked to Install AI monitoring cameras | The Express Tribune

ISLAMABAD:

Pakistan’s tax chief on Wednesday warned Chinese companies to either fully disclose their production or wind up operations after a representative of four firms told a parliamentary panel that their managements were refusing to allow installation of monitoring cameras.

Federal Board of Revenue (FBR) Chairman Rashid Langrial issued the warning during a meeting of the Senate Standing Committee on Finance, reflecting the government’s zero tolerance for what it estimates to be Rs30 billion in annual tax evasion by tile manufacturers through the understatement of production.

Langrial said the government had decided to install Artificial Intelligence-enabled cameras to monitor production at all ceramic factories, whether locally or foreign-owned.

Representatives of four Chinese companies, including their Chinese management, appeared before the committee and urged senators to stop the FBR from installing cameras. The meeting was chaired by Pakistan Peoples’ Party (PPP) Senator Saleem Mandviwalla.

The companies argued that monitoring their production lines could compromise trade secrets – a claim Langrial vehemently rejected.

He said the FBR had already accommodated Chinese investors by reducing the number of cameras from 16 to five per factory, adding that the devices would be placed only where production output could be accurately monitored.

Pakistan faces widespread tax evasion, including by firms formally registered in the tax net. To curb the issue, the government has decided to install monitoring cameras in 18 sectors identified as high-risk for revenue leakages. A local representative of the Chinese firms told the committee that their boards of directors had refused to install cameras on production lines. He reiterated their concerns about exposing business secrets. Langrial responded that the camera placement ensured only production counts would be captured.

“If your board of directors does not agree to install the cameras, then you should stop work,” thundered Langrial, accusing the companies of underreporting output.

State Minister for Finance Bilal Azhar Kayani said factory owners would benefit from the system because no FBR officials would be physically present. Production, he said, would be counted through AI-driven video analytics.

Kayani added that the reduction in the number of cameras demonstrated the government’s willingness to listen to business concerns. “The real issue is to ensure accurate counting of goods so full sales tax is paid,” he said.

To a question, Kayani told the committee that Prime Minister Shehbaz Sharif regularly meets the business community, and cabinet members hold weekly sessions with industry to address concerns. The government, he said, was facilitating investors in every possible way.

The Chinese company representative argued that their firms operate in Saudi Arabia and other countries where cameras are not installed at production lines. He also criticised the government for making overnight tax policy changes, claiming the sector was not consulted before the decision was made to install cameras.

Langrial countered that the decision was made on the request of the Pakistan Tiles Manufacturers Association, which had complained of underreporting and tax evasion by competitors. He noted that the sugar industry had long been notorious for evading taxes, prompting the government to install cameras at mills. Even the sugar factory owned by Industry Minister Haroon Akhtar Khan had cameras installed, and he had raised no objection, said Langrial.

After camera installation in the sugar and cement sectors, the government expects to generate an additional Rs76 billion and Rs102 billion, respectively, in the current fiscal year, Langrial added.

Female employees’ dress code

The Senate standing committee also instructed the State Bank of Pakistan (SBP) to take action against certain commercial banks accused of forcing female employees to wear abayas.

Senator Dr Zarqa Taimur raised serious objections to these dress code policies, arguing that women in Pakistan already dress modestly and that there was no requirement to impose further restrictions. Senator Farooq Naek condemned the practice in strong words, saying: “Forcing someone to wear an abaya is exactly the same as forcing a man to grow a beard.” He questioned how the central bank could allow such policies. The committee decided to summon the banks concerned to explain their dress code policies. Mandviwalla also expressed strong concerns stating that under the guise of Islamic banking, many were charging higher profit rates (interest) than conventional banks. He dubbed the practice a form of “fraud and deception.”