Imported vehicles likely to cost more after new FBR valuation rules

ISLAMABAD: The Federal Board of Revenue (FBR) has implemented a new system to value imported vehicles for customs purposes, which will increase car import expenses through this policy change.

The FBR has established new customs evaluation procedures through its January 26 Customs General Order, which replaces the previous 2005 order that had existed for many years.

The new order establishes that no local authorized agents will participate in the valuation process. Importers could use price certifications from local agents or the Asian Trust Price system to determine vehicle import costs in the past system.

The methods used included multiple methods, which led to decreased product pricing for their products, resulting in reduced tax obligations. The practice developed into a standard procedure that businesses followed throughout the entire import industry.

The new order has removed the term “or their authorized local agents” from important sections that determine how vehicle value should be measured. Customs officials will now determine vehicle value through the Manufacturer’s Suggested Retail Price (MSRP), which the original manufacturer establishes.

This adjustment eliminates an existing loophole that had permitted price manipulation through the use of agent-issued certificates, according to industry sources.

The official global price of the MSRP exceeds both ATP-based and agent-declared values, which results in higher duties and taxes for importers starting from now.

The government has established this initiative as part of its broader strategy to create uniform customs valuation procedures and enhance revenue collection transparency. The officials expect that using manufacturer pricing as a basis will lead to fewer conflicts and accurate product evaluations.