PIA Hasn’t Paid Excise Duty and Sales Tax Worth Billions in Two Years

Pakistan International Airlines (PIA) has not filed its federal excise duty (FED) and sales tax (ST) returns with the Federal Board of Revenue (FBR) in two years.

According to documents available with ProPakistani, the state-owned carrier has been a non-filer of FED and ST returns since December 2020 and owes billions to the tax machinery.

The national flag carrier owes taxes to the tune of Rs. 26.157 billion to the FBR, of which Rs. 7.982 billion has been deferred by the Federal Cabinet’s Economic Coordination Committee (ECC). Regardless, it was discovered that no-stay orders totaling Rs. 16.045 billion remain unrecovered and have been increasing since 2017.

Sources privy to the matter revealed that the FBR had frozen PIA’s bank accounts for non-payment of federal excise duty on tickets for the last two years. It maintains that the flag carrier had to pay Rs. 4.5 billion FED on the tickets it collected for the last two years. A total of 53 PIA accounts have been frozen to make the recoveries, the FBR added. The tax machinery has recovered Rs. 465 million so far, and the accounts will remain frozen until the retrieval of another Rs. 4.135 billion.

It is noteworthy that since the PIA is a public entity, the government has the right to book adjustments of all the liabilities in any way that is pursuant to the existing regulations. It is expected that, when recovered, the payable amount will be reflected in the FBR’s upcoming revenue collection target.

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