Govt seeks IMF approval for tax exemptions to privatise PIA

To make Pakistan International Airlines (PIA) more attractive to potential investors, the government plans to seek International Monetary Fund's (IMF) approval for tax exemptions to privatise the national carrier.

“The bidders are seeking tax relief,” revealed Minister of Privatisation Aleem Khan in a briefing to a parliamentary panel. 

He said the airline would be successfully privatised after critical tax exemptions and financial adjustments to make the PIA an attractive investment for buyers. 

Additionally, the government has to sort out the issue of negative equity of Rs45 billion, which includes carving out legacy liability to ensure a clean financial slate for investors before the transaction is finalised.

Investors demanded Rs26 billion tax exemption, the concession of Rs10 billion to bridge the financing gap and the transfer of PIA-owned property in Islamabad worth Rs12 billion.   

Despite, the government must follow the tax relief plan of the global loan lenders, still it wants the IMF to approve an Rs26 billion tax exemption for the national flag carrier.

“We had conveyed these demands to the government, but the Federal Board of Revenue (FBR) and finance ministry stonewalled these demands, leaving the privatisation process in limbo. They did not support us,” the minister said.