In a major policy shift that is set to reshape the imported car market in Pakistan, the Federal Board of Revenue (FBR) has announced significant changes to how customs value imported vehicles. Under the newly issued Customs General Order (CGO) No. 02 of 2026, the long-standing use of “local agent” valuations for determining customs duty has been removed, ushering in a more stringent and transparent valuation system.
End of the “Local Agent” Loophole
For many years, car importers relied on the Asian Trust Price (ATP) system and certificates provided by authorised local agents to declare a lower value for vehicles at customs. This often resulted in reduced customs duties and taxes, offering a cost advantage to importers. However, with the new rules in place, the words “or their authorised local agents” have been omitted from the valuation criteria, eliminating this option entirely.
Shift to Manufacturer’s Suggested Retail Price (MSRP)
Under the revised policy, customs officials will now base vehicle valuation primarily on the Manufacturer’s Suggested Retail Price (MSRP) — the official global retail price set by the vehicle manufacturer. Since MSRP is typically higher than ATP or local agent valuations, this change is expected to result in a substantial increase in assessed customs duties and taxes for imported vehicles.
This move aims to standardise the valuation process, reduce under-invoicing, and enhance transparency in customs assessments. However, for buyers and small import businesses, the immediate consequence will likely be higher import costs and increased overall expenses when bringing in vehicles from overseas markets.
Impact on Importers and Buyers
The removal of local agent pricing is causing concern among car dealers, individual importers, and prospective buyers. Key implications include:
- Higher Customs Duties: With valuations tied to MSRP, taxable values on imported cars will rise significantly.
- Increased Import Costs: Higher duties lead to higher final prices for imported vehicles in the market.
- Market Adjustments: Buyers may reconsider importing vehicles or shift focus toward locally assembled models or hybrids due to rising costs.
Industry analysts believe that while the new approach enhances fiscal transparency, it also removes a previously legal mechanism that helped some importers manage costs. Buyers planning to import vehicles should now prepare for adjusted duty estimates and review the new valuation structure before shipment.
What This Means for Vehicle Import Trends
The FBR’s decision will likely influence Pakistan’s auto landscape by:
- Encouraging a move toward more transparent and uniform customs valuation
- Potentially slowing down smaller import volumes in the short term
- Shaping strategic decisions by dealers and buyers around cost, timing, and market demand
While this could create short-term challenges for importers, the long-term aim is to strengthen compliance and reduce discrepancies in customs assessment practices.
Sigma Motors’ Insight
At Sigma Motors, we monitor regulatory changes that impact global vehicle imports so our customers can make informed decisions. If you are considering importing a vehicle to Pakistan, be aware of the updated customs valuation rules — especially if you rely on cost planning and duty estimates.