Major Under-Invoicing Scandal Uncovered in Imported Luxury Vehicles
A startling customs audit has revealed a widespread under-invoicing scheme involving luxury car imports, exposing serious lapses in regulatory oversight and raising concerns over trade-based money laundering.
Toyota Land Cruiser Declared at Just Rs. 17,635
The Directorate General of Post Clearance Audit (PCA) has unearthed one of the largest customs evasion cases in recent years.
According to the official audit report, 1,335 imported vehicles were declared at significantly undervalued prices—well below their actual market rates.
In a shocking instance, a 2023 Toyota Land Cruiser imported from Japan was declared at just Rs. 17,635, despite its true value being close to Rs. 10 million. The evasion in this single case alone led to customs duty and tax losses of Rs. 47.2 million, reflecting nearly 99.8% under-invoicing.
Billions Lost in Tax Revenue and Compliance Failures
Between December 2024 and March 2025, the government is estimated to have suffered a tax shortfall of Rs. 17.5 billion, stemming directly from these undervalued declarations.
The PCA report also highlighted that many importers failed to submit official banking remittance records, raising red flags about the use of informal financial channels such as Hundi and Hawala.
This undermines both Pakistan’s foreign exchange monitoring and its compliance with international financial regulations.
Furthermore, the audit connected these import practices to under-reporting of assets in income tax filings, pointing to broader patterns of financial misrepresentation.
System Exploited via “Faceless” Customs Assessment
A key concern raised by auditors was the misuse of the Faceless Customs Assessment (FCA) system. Despite evident discrepancies in the documents,
customs officials reportedly failed to carry out proper verification checks, allowing importers to exploit loopholes in the automated system.
The PCA has flagged this as a high-risk Trade-Based Money Laundering (TBML) activity, warning that it threatens Pakistan’s financial credibility—particularly at a time when the country remains under close watch by global institutions like the FATF and IMF.
Authorities have yet to announce any penalties or prosecutions, but the findings are expected to trigger further investigations into both importers and customs personnel involved in the scheme.
