A massive customs duty evasion scheme involving the under-invoicing of luxury vehicles has rocked Pakistan, following the release of a 127-page audit report by the Directorate General of Customs Post Clearance Audit (PCA). The report, covering imports from December 2024 to March 2025, uncovered systematic fraud involving 1,335 high-end vehicles, including Toyota Land Cruisers, with a tax shortfall of PKR 18.78 billion (approximately Rs. 583 Crores).
The PCA audit revealed that 99.8% of all Land Cruisers imported during the period were falsely undervalued, with some vehicles worth over PKR 10 million (Rs. 310 Crores) declared at prices as low as PKR 17,635 (Rs. 5,479). In one case, a vehicle that should have generated PKR 4.5 million (approx. Rs. 14 Lakhs) in duties paid only a fraction, allegedly with assistance from within customs.
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This marks the largest trade-based money laundering scandal related to luxury cars in the country’s history. The audit suggests that the scam operated through Pakistan’s digital customs platform, known as the faceless assessment system, which was introduced to reduce human intervention but is now being blamed for enabling widespread abuse.
Digital Loopholes and Hawala Networks Fuel the Scam
The report points to significant loopholes in the digital clearance system that were exploited by importers to misdeclare vehicle values. Not a single importer, the audit notes presented proof of legitimate overseas payments for the cars. This has raised concerns that illegal hawala and hundi networks were used to transfer funds, further deepening the money laundering allegations.
The total declared value of the 1,335 vehicles was PKR 670 million (Rs. 20 Crores), while the actual market value stood at over PKR 7.25 billion (Rs. 225 Crores), indicating a deliberate and coordinated effort to defraud the state.
The scandal has prompted urgent action from multiple government bodies, including the Federal Board of Revenue (FBR), the State Bank of Pakistan, and the Financial Monitoring Unit (FMU), all of whom have launched investigations into the transactions.
Pakistan’s financial system, already under scrutiny by global watchdogs like the FATF and IMF, faces renewed pressure to enhance its regulatory oversight and enforcement mechanisms. The audit findings have been submitted for further legal and financial action against the importers and potentially complicit customs officials.