Karachi : Pakistan’s much-touted Faceless Customs Assessment (FCA) system has suffered a massive revenue loss of Rs. 38 billion during just three months of operations, casting serious doubts over this corruption-proof digital reform.
This was revealed in an audit report prepared by the Directorate General of Post Clearance Audit (PCA) for the period from December 16, 2024, to March 15, 2025.
The audit was conducted by just nine officers covering the entire PCA South region, compared to over 100 officers facilitating FCA clearances. This severe resource imbalance meant only 8.8% of total clearances could be audited, suggesting the actual scale of losses could be far greater.
According to the details, the PCA, South has examined 13,140 Goods Declarations (GDs) out of 149,086 total clearances, detecting irregularities in nearly one in every five transactions they have audited.
The audit revealed multiple layers of revenue hemorrhaging across different categories of violations.A staggering Rs. 7.44 billion was lost through duty and tax evasion in just 1,524 GDs, averaging over Rs. 3.3 million per declaration. Additionally, Rs. 10.538 billion worth of restricted goods were cleared in violation of Import Policy Order conditions across over 1,006 GDs involving items that should never have passed customs.
The most significant loss came from the failure to frame contravention cases as required under regulations, resulting in Rs. 30.364 billion in losses, with less than 2% of such cases being officially booked.
The reported Rs. 38 billion figure excludes an additional Rs. 23 billion in statutory fines linked to smaller-scale duty evasions, suggesting the actual losses could be substantially higher.
Among the most shocking revelations was the massive under-invoicing of luxury vehicles, with discrepancies reaching 91%. Out of 1,335 vehicle import GDs reviewed, declarations worth Rs. 670 million were enhanced to Rs. 7.254 billion during assessment, yet even these enhanced valuations were processed without proper verification of foreign remittances.
The audit specifically highlighted cases like luxury Toyota Land Cruiser imports being declared at absurdly low values, raising concerns about potential money laundering through illicit channels.
The audit also flagged over 4,973 import consignments, including solar panel containers worth Rs. 23.4 billion, that remained unclaimed at ports for unusually long periods, with some delayed by over two years.
These containers were cleared on unauthorized National Tax Numbers and Customs User IDs, raising trade-based money laundering concerns worth Rs. 643 million.
Even goods subjected to multiple assessment stages showed faulty processing, with 313 GDs wrongly assessed despite full oversight, leading to Rs. 2.11 billion in duty evasion.
An additional 58 GDs that passed through Quality Assurance still resulted in Rs. 77.2 million losses, including cases of misclassification, illegal exemptions, undervaluation, and vague goods descriptions.
The audit report further said that Pakistan’s customs framework has become “heavily tilted toward blind facilitation,” allowing repeated misdeclarations and tax evasions without accountability. The report warned that limiting visibility of GD particulars under FCA has undermined assessment quality, creating a “structural lag in the taxation framework.”
The PCA South audit report also urged the authority concerned for immediate action, including reinforcing audit directorates with qualified staff, rebalancing the FCA model to restore supervisory checks, digitally flagging GDs for mandatory contravention framing, and launching forensic probes into repeated GD re-filing
