A massive customs fraud involving luxury vehicle imports has rocked Pakistan, with an audit exposing how importers exploited the country’s digital customs system to evade approximately PKR 18.78 billion in taxes and duties between December 2024 and March 2025. The 127-page audit report, conducted by Pakistan’s Directorate General of Customs Post Clearance Audit (PCA), reveals this as the biggest trade-based money laundering scandal in the country’s history.
The report sheds light on rampant under-invoicing of luxury vehicles—most shockingly, a Toyota Land Cruiser, typically valued at over PKR 10 million, was cleared through customs at a declared value of merely PKR 17,635. This manipulation was reportedly enabled by collusion between importers and customs officials operating within Pakistan's faceless, digital customs system, originally designed to streamline trade and ensure transparency.
This scam involved the import of 1,335 high-end vehicles, with a declared total value of PKR 670 million, while the actual market value of these vehicles exceeded PKR 7.25 billion. Astonishingly, 99.8% of all Toyota Land Cruisers imported during the period were under-invoiced, leading to massive losses in customs duties and income taxes. A single properly taxed Land Cruiser should have brought in around PKR 4-4.5 million in duties alone.
Pakistan, which lacks a robust automobile manufacturing base, relies heavily on imports to satisfy domestic demand, especially among the country’s elite. Vehicles such as Mercedes-Benz, BMW, Audi, and Range Rover are status symbols, making the luxury car market particularly active—and vulnerable. The ease of importing used and new vehicles has also created fertile ground for fraudulent practices.
The audit found that importers not only under-declared vehicle values but also failed to produce any proof of legitimate overseas payments. This has raised concerns about the use of illegal hawala and hundi networks, which are notorious for enabling cross-border money laundering. These activities pose significant threats to Pakistan’s financial stability, especially at a time when the country is trying to align with Financial Action Task Force (FATF) and International Monetary Fund (IMF) compliance standards.
The PCA report has been forwarded to major government and regulatory bodies including the Federal Board of Revenue (FBR), the State Bank of Pakistan, and the Financial Monitoring Unit (FMU), prompting a nationwide investigation into the scope of the scam and the networks enabling it. With Pakistan’s economic credibility already under strain, this scandal could deepen scrutiny from international financial institutions and regulatory watchdogs.
