This project evaluates Pakistan’s Track and Trace System (TTS), a digital intervention implemented in 2021 that mandates tamper-proof tax stamps and real-time supply chain monitoring in sectors prone to tax evasion such as tobacco, sugar, cement, and fertiliser. Leveraging administrative microdata and the staggard rollout of TTS, the study examines its causal impact on firms’ tax compliance, formalisation along supply chains, price incidence, and market competitiveness.
The study is being conducted in collaboration with researchers at the Lahore University of Management Sciences and support from the Federal Board of Revenue. It aims to provide robust evidence on the potential and limitations of digital traceability in creating self-enforcing capabilities of VAT systems, offering policy insights relevant not only for Pakistan but also for other lower- and middle-income countries adopting similar technological reforms.