October 22, 2020

FBR directs manufacturing sectors to install monitoring equipment on-site; no data protection protocols issued

On September 19, 2020, the Federal Board of Revenue (FBR) issued the Statutory Regulatory Order (SRO) 889 (I) 2010 to amend the Sales Tax Rules, 2006 through which it was made mandatory for at least 30 manufacturing sectors to install electronic monitoring systems at their premises. Statutory Regulatory Orders (SROs) are executive orders used to amend tax laws passed by the Parliament in the country.

The move came after FBR claimed a number of manufacturers were misrepresenting and misleading the taxation authority regarding their volume of production. Through these monitoring systems, FBR will now be able to keep track of the production in “real-time” which will make it difficult for the companies to evade taxes. 

The monitoring will be carried out by intelligent video surveillance and video analytics through surveillance equipment approved by the FBR, including the cameras and sensors. This will allow for the data to be transmitted in real time to the “central control room” at the FBR where they can track object counting, detect unexpected stops, carry out quantitative analysis of productions, and data analytics for required legal actions. 

The amendment also lays down requirements on how to become an authorised vendor for the sale and purchase of the intelligent video surveillance equipment. These vendors would need approval from the approval committee of the FBR, also created under the amendment. Moreover, FBR has also directed its IT department to develop a software that will run the real-time monitoring of production. 

The copy of the amendment can be accessed here.

In addition, FBR would provide technical support to the manufacturers including setting up all the new IT infrastructure, software upgrades and to assist in any technical issues that may arise. The manufacturers are required to allow full access to FBR officials for the installation and monitoring of these systems as well as to report any problems that may occur with the systems. 

However, the amendments do not specify if the surveillance footage will be accessible to only certain authorised individuals within the FBR, which gives rise to concerns about the privacy of the workers in these manufacturing companies. It also raises questions about the data protection protocols to be put in place to ensure the safety of this multi-medium data, especially in the absence of a data protection law in the country. Pakistan has a recent history of CCTV footage of public and private spaces being leaked and misused, violating the privacy rights of many regular citizens.

For instance, the recent Lahore cinema CCTV incident sparked outrage among the digital rights community, giving rise to a debate on the constitutional right to privacy. It was highlighted then that people must be made aware of the fact that they are being recorded on camera, and to be provided with a guarantee that their recordings will only be accessible to designated and responsible persons within the organisations. 

The consequences of surveillance footage leaks become worse especially in the absence of data protection legislation, since people do not have legal recourse available to them in case their videos land in the wrong hands intended to pose harm. The FBR must take into account the privacy ramifications of this amendment and take appropriate action to ensure that the workers of the factories being surveilled will be protected from any privacy breaches.

Written by

Salwa Rana is a Legal Officer at Media Matters for Democracy.

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