Key Takeaways
- The government plans to extend the General Sales Tax (GST) exemption currently available to Pakistan International Airlines (PIA) to all domestic airlines.
- This move aims to ensure a level playing field across the aviation sector and is expected to benefit other airlines starting next year.
- The decision was recommended by the National Assembly Standing Committee on Privatization.
The government has announced plans to extend the General Sales Tax (GST) exemption currently available to Pakistan International Airlines (PIA) to all domestic airlines, according to officials. This move is part of efforts to ensure a level playing field across the aviation sector and is expected to benefit other airlines starting next year.
During a meeting of the National Assembly Standing Committee on Privatization, Privatization Adviser Muhammad Ali informed members that 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 similar relief to other airlines to ensure fairness.
Committee members decided to recommend that Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb extend the exemption to all airlines, aligning with the committee's goal of promoting a competitive environment in the aviation industry. The decision reflects the government’s commitment to support the sector through tax incentives.
The Privatization Commission Secretary Usman Akhtar Bajwa informed the committee that the GST exemption was introduced at the request of bidders during the PIA privatization process. He stated, 'This measure was proposed by bidders as a condition for their participation in the privatization process.'
According to official figures, the government expects to receive Rs. 55 billion from the sale of PIA, with Rs. 10 billion already received and the remaining Rs. 45 billion to 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 announced plans for the redevelopment of the Roosevelt Hotel in New York through a joint venture, with Citibank currently shortlisted as financial adviser for the transaction. This move is part of broader efforts by the government to diversify its investment portfolio and generate additional revenue streams.
Committee members expressed support for the decision, stating that it would help level the playing field among airlines operating in Pakistan. Dr. Farooq Sattar, chairman of the committee, said, 'This move will ensure fair competition and encourage more private sector participation in the aviation industry.'
'The government intends to provide the same relief to other airlines to ensure a level playing field across the aviation sector.'
Privatization Adviser Muhammad Ali
'This measure was proposed by bidders as a condition for their participation in the privatization process.'
Usman Akhtar Bajwa, Privatization Commission Secretary
