The government is planning to extend the General Sales Tax (GST) exemption currently available to Pakistan International Airlines (PIA) to all domestic airlines from next year, officials told the National Assembly Standing Committee on Privatization.
During the committee meeting chaired by Dr. Farooq Sattar, Privatization Adviser Muhammad Ali said PIA was granted a one year GST exemption on aircraft and spare parts as part of its privatization process.
He added that the government intends to provide the same relief to other airlines to ensure a level playing field across the aviation sector.
Privatization Commission Secretary Usman Akhtar Bajwa told the committee that the GST exemption was introduced at the request of bidders during the PIA privatization process.
Committee members decided to recommend that Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb extend the exemption to all airlines.
The committee was also informed that the government expects to receive Rs. 55 billion from the sale of PIA, of which Rs. 10 billion has already been received, while the remaining Rs. 45 billion will be paid after the transfer of the remaining 25 percent stake.
The new owners have already injected Rs. 80 billion into the airline and plan to invest an additional Rs. 45 billion.
Separately, the Privatization Commission said the government plans to redevelop the Roosevelt Hotel in New York through a joint venture, with Citibank currently shortlisted as financial adviser for the transaction.
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