Pakistan’s customs authorities suffered revenue losses of more than Rs. 3.56 billion after imported goods were misclassified and undervalued, according to a new audit report highlighting widespread irregularities across Federal Board of Revenue (FBR) field formations.

The audit found that 16 FBR field offices incorrectly classified 7,585 import consignments under wrong Pakistan Customs Tariff (PCT) codes, resulting in the short recovery of over Rs. 2.35 billion in customs duties and taxes.

The report said products including food items, mobile phone pouches, power cables, printing ink and auto parts were cleared under incorrect tariff headings, allowing importers to pay lower duties than required.

In a separate finding, auditors identified 2,246 import consignments at 17 FBR field offices that were cleared using values below their actual import prices, causing another Rs. 1.20 billion in revenue losses.

Items affected included household appliances, watches, soap, cosmetics, tea, fabrics, solar inverters and mobile phone covers.

According to the audit, weak enforcement of Customs Valuation Rulings enabled the revenue leakage and undermined customs compliance.

The report said authorities have recovered only Rs. 2.5 million so far, while recoveries exceeding Rs. 810 million are under process. Cases involving more than Rs. 1.46 billion remain pending, while claims worth over Rs. 1.27 billion could not be substantiated due to insufficient evidence presented by the department.

The Departmental Accounts Committee (DAC) directed customs authorities to expedite recoveries, submit progress reports on pending cases, strengthen post-release verification, and initiate disciplinary action against officials found responsible.

The audit warned that import misclassification and undervaluation have repeatedly surfaced in previous audits, indicating persistent weaknesses in customs enforcement and internal controls.