The Federal Board of Revenue (FBR) has waived Rs. 4.29 billion in default surcharges and penalties on the current income tax liabilities of Pakistan International Airlines Corporation Limited (PIACL), easing the airline’s financial obligations following its privatization.
The exemption was granted through SRO 1129(I)/2026, issued on Thursday.
Relief Covers Tax Penalties and Surcharges
According to the notification, the waiver includes:
- Rs. 263.82 million in default surcharges and penalties related to withholding tax (excluding salary tax) for the period April to December 2024.
- Rs. 4.03 billion in surcharges and penalties on advance income tax covering the period May 2024 to June 2025.
The total amount exempted stands at Rs. 4.293 billion.
Linked to PIA Privatization
The FBR said the exemption has been granted to facilitate the successful completion of PIA’s privatization process, ensure timely execution of the transaction documents, and fulfill commitments made under the agreement with the successful bidder.
The development comes nearly two weeks after Lt. Gen. (Retd.) Anwar Ali Hyder was appointed as the first Chairman of the newly privatized PIACL following the transfer of management control to the Arif Habib Corporation-led consortium.
Tax Payments to Be Made Over Four Years
The notification states that PIACL’s current tax liabilities remain subject to final determination.
Under the approved arrangement, the airline will pay its outstanding income tax liabilities over four years, following a one-year grace period, through equal annual installments after the First Completion, as defined in the Share Purchase and Subscription Agreement signed between the Government of Pakistan and the successful bidder.
