The Federal Board of Revenue (FBR) has de-attached the bank accounts of Pakistan International Airlines (PIA) keeping in view the financial position and cashflow issues of the national flag carrier.
Presently, the PIA pays Rs. 1.3 billion per month to FBR under the head of the Federal Excise Duty (FED), but the outstanding amount due to be paid by PIA stands at over Rs. 8 billion.
Due to cashflow issues, PIA is facing difficulties in payments of due taxes and this problem is being dealt with by officials of both FBR and PIA. However, due to the default in fulfillment of commitments, FBR froze its bank accounts recently which have now been unfreezed.
The financial situation of PIA remains dire as the airline must pay at least $100 million immediately to about half a dozen leasing firms it engaged for chartering aircraft, airport authorities, aircraft spares, and other services.
The national flag carrier has largely survived on regular bailouts from the government and received a support commitment earlier this week. The company’s liabilities have risen to Rs. 743 billion ($2.5 billion), more than five times its total assets.
Editorial & Legal Practice Group
Authored and reviewed by the corporate law and tax litigation practice group at Javid Law Associates. Our team comprises High Court advocates, corporate legal advisors, and authorized tax practitioners across Pakistan.
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Jurisdiction: Pakistan