In a landmark step towards comprehensive digitization, the Federal Board of Revenue (FBR) has launched Pakistan’s first-ever Artificial Intelligence (AI)-based Customs Clearance and Risk Management System (RMS). This pioneering initiative, introduced under the direct instructions of Prime Minister Shehbaz Sharif, is set to transform import-export operations by enhancing transparency, significantly reducing human intervention, and facilitating trade across the country.
The development was highlighted during a meeting concerning FBR matters held on Monday, as per a statement released by the Prime Minister’s Office (PMO).
AI and Machine Learning at the Core
The new system leverages advanced AI and bots to assess the cost and nature of goods during import and export operations. A key feature of the RMS is its capability for continuous improvement through machine learning, allowing the system to refine its risk assessment capabilities automatically as more goods move through the system.
During initial testing, the AI-powered RMS demonstrated an impressive over 92% improved performance. Notably, it identified 83% more Goods Declarations (GDs) for tax collection, while simultaneously enabling 2.5 times more GDs to be cleared through the green channel, indicating both enhanced revenue generation and increased efficiency for compliant traders.
Benefits: Transparency, Efficiency, and Ease of Business
Officials at the meeting emphasized that the new RMS will bring unprecedented transparency to the customs clearance process, minimize human intervention, and significantly facilitate the business community. The system promises instant and efficient estimation of goods and their value, leading to substantial time savings for importers and exporters.
Prime Minister Shehbaz Sharif reiterated the government’s commitment to FBR reforms, stating, “Reforming the FBR is among the top priorities of the government.” He added, “By automating the tax system, we are making it more transparent and effective. This technology-driven system will ease doing business and provide convenience to taxpayers.” The Prime Minister also instructed that the new system be made fully integrated and sustainable, commending the officers and staff involved in its development.
Broader FBR Reforms and Video Analytics
In a separate review meeting chaired by PM Shehbaz, ongoing FBR reforms were assessed. The Prime Minister was briefed on additional video analytics-based measures being implemented to improve tax collection, particularly within the manufacturing sector. Officials informed the PM that this system would enable automated and transparent tax recovery, aiming to boost government revenue while allowing taxpayers to fulfill their obligations without human interaction. This system, too, is described as low-cost and demonstrated 98% efficiency during initial testing, showcasing its potential to significantly increase tax collection from the manufacturing sector.
The introduction of these AI and video analytics-based systems marks a pivotal moment in Pakistan’s tax administration, signaling a strong push towards modernizing and digitizing revenue collection processes for greater efficiency and transparency.
