FBR Scraps Local Agent Price System — Imported Cars to Get Costlier in Pakistan

 

The Federal Board of Revenue (FBR) has shaken up the automobile import industry in Pakistan with a major policy change that could significantly affect car importers and buyers. In a new Customs General Order (CGO) No. 2 of 2026, the tax authority has removed the role of authorised local agents from determining the valuation of imported vehicles — both new and used.

This move marks the end of a long-standing practice where local authorised dealers certified prices for Customs valuation, often allowing lower taxable values through the Asian Trust Price (ATP) system and agent certificates.

🛃 What Changed in the Import Valuation System?

Under the amended Customs General Order No. 14 of 2005, several key changes were introduced:

✔ Local authorised agents have been removed from the vehicle valuation process.
✔ Customs will now use the Manufacturer’s Suggested Retail Price (MSRP) or the FOB (Free On Board) value directly from manufacturers to assess duties and taxes.
✔ Importers no longer need certificates from local agents at ports for valuation.

This applies to new vehicles and used/luxury imports, especially those from Europe.

📈 Why This Matters

🔹 End of ATP & Local Agent Valuations

For years, many importers relied on the ATP valuation and certificates from local authorised agents to declare lower car values, which resulted in lower customs duties and taxes. By removing this route, the FBR aims to stop under-invoicing and increase transparency in tax collection.

🔹 Shift to Manufacturer-Certified Prices

Now, customs officials will use online manufacturer-certified FOB/MSRP data, which is less flexible and generally higher than previous locally certified values. This means the base value for duty calculations will increase, potentially pushing import costs higher.

🔹 Likely Rise in Imported Car Prices

With valuation based on global MSRP instead of local agent estimates or ATP figures, duty payments on imports are expected to go up. This could directly influence prices for buyers and reduce profit margins for importers who previously relied on agent certificates to minimize costs.

🚗 Impact on the Auto Market

1. Higher Costs for Importers and Buyers
Importers of luxury and high-end vehicles may face higher customs duties and taxes, since vehicle values for tax purposes will be based on global retail prices. This could translate into higher on-road prices for imported cars in Pakistan.

2. Greater Transparency and Reduced Loopholes
The FBR’s shift towards manufacturer-based pricing aims to reduce discretionary practices, curb undervaluation and strengthen revenue protection for the government.

3. Simplified Process for Importers
While this increases taxable value, it also simplifies the clearance process, as importers no longer need to deal with local agent certificates or extra fees for valuation certification.

🧠 What This Means for You

If you’re considering importing a vehicle or buying an imported car in Pakistan:

🔹 Expect higher customs duties and taxes compared to the previous valuation system.
🔹 Imported luxury vehicles, especially from Europe, will now incur taxes based on MSRP/FOB values, which are generally higher than ATP values.
🔹 The new system may lead to less price manipulation but could slow down some import demand due to increased cost pressure.