The Senate Standing Committee on Finance on Sunday opposed a proposal to grant sales tax exemption on the import of aircraft and parts exclusively to Pakistan International Airlines Corporation Limited (PIACL), directing the government to extend the relief to all airlines to avoid discrimination.
The committee reviewed recommendations on the Finance Bill 2026-27 and completed clause-by-clause consideration of proposed amendments to the Sales Tax Act and the Federal Excise Act.
During the meeting, committee chairman Senator Saleem Mandviwala objected to limiting the exemption to PIACL, saying such a move would unfairly disadvantage other players in the aviation sector.
“This is total discrimination, which cannot be allowed. The whole aviation industry should benefit from this tax relief,” he said, warning that restricting the exemption to one airline could trigger litigation from other carriers.
He urged the finance ministry, the Tax Policy Unit and the Federal Board of Revenue (FBR) to include all airlines in the exemption schedule of the Sales Tax Act.
Responding to the concerns, Finance Minister Muhammad Aurangzeb said the exemption had been proposed in the context of PIACL’s privatisation and was intended to facilitate the import of new aircraft as part of that process.
He said any move to extend the exemption to all airlines would require the approval of the International Monetary Fund (IMF).
The committee, however, agreed to amend the proposal and recommended that the exemption framework be broadened beyond PIACL to cover all eligible airlines.
The panel also approved proposals related to the digitisation of the FBR and the introduction of its faceless Inland Revenue system.
It further clarified the importance of bulletproof vehicles for the Shanghai Cooperation Organisation (SCO) summit, while seeking details regarding the number and type of vehicles required in view of security threats to government officials.
The committee also approved the expansion of the Third Schedule of the Sales Tax Act by adding new items on which sales tax would be charged on the basis of the printed retail price.
In addition, it endorsed amendments relating to the auction of seized goods, allowing such auctions to be conducted through e-auction under the revised framework.