FBR Waives PIA Penalties to Support Privatization Process

ISLAMABAD: (Web Desk) –  In a significant move, the Federal Board of Revenue (FBR) has announced an immediate waiver of penalties and surcharges imposed on Pakistan International Airlines.

The decision was formalized through SRO.799(I)/2026 and has been implemented under Section 183 of the Income Tax Ordinance, 2001, following approval from the federal cabinet in December 2025.

According to officials, the government has exempted default surcharges and penalties on PIA’s current tax liabilities, amounting to approximately Rs8.76 billion, subject to final assessment.

The move is aimed at facilitating the airline’s ongoing privatization process, making it more attractive to potential investors and ensuring smoother completion of transaction agreements.

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Authorities noted that this relief is part of broader efforts to address the long-standing financial difficulties faced by PIA and to streamline its divestment.

However, the waiver comes with conditions. PIA is required to clear all outstanding tax liabilities recorded up to June 30, 2025, within a four-year period.

The repayment plan includes a one-year grace period, after which the remaining amount will be paid in equal annual installments.

Officials added that the repayment schedule will begin after the “First Completion” stage, as outlined in the Share Purchase and Subscription Agreement between the Government of Pakistan and the successful bidder.