FBR grants five days to PIA for clearing outstanding Rs 1.7b taxes

KARACHI: The Federal Board of Revenue (FBR) has withdrawn the notices served upon the Pakistan International Airlines (PIA) on the assurance that airline authorities would pay off Rs 1.70 billion by October 5, 2015.


However, the PIA assured it would pay at least Rs 300 million by September 30, 2015.

In this regard, the authorities of the FBR and PIA held a detailed negotiation at the PIA headquarters on September 30, 2015. The FBR was represented by Chief Commissioner Mohammad Irshad while the PIA was represented by Chief Financial Officer Nayyar, well-placed sources told Customs Today.

“The PIA authorities have assured that they would ensure the payment of Rs 300 million pending duty/taxes by Sept.30 evening, while the remaining amount would be paid off by October 5, 2015”, sources disclosed.

The four bank accounts operated by PIA at Habib Bank Limited (HBL) and National Bank of Pakistan (NBP) were frozen for recovery of Rs 1.2 billion of income tax and Rs 1 billion of federal excise duty.

The FBR on May 30 served two notices of FED and income tax on PIA for the recovery of principal amount of around Rs 1.4 billion. The latest recovery included the fine and penalties as well.

In the FED notice, the FBR directed the PIA to pay the outstanding FED amount of Rs 876.81 million in respect of international passengers immediately and proof of payment should be provided to tax office concerned by June 03, 2015.

The notice further said that the PIA was in default of Rs 443.69 million for the tax period December 2014 and Rs 433.11 million for tax period January 2015 as per its own calculation provided to tax office concerned. The amounts were due on April 15, 2015 and May 15, 2015 respectively, but the same had not been paid.

In the income tax notice, the notice for personal attendance issued to chief financial officer and assistant manage corporate tax of PIA. The notice was served after non-compliance by the PIA with three previous notices.

FBR sources said that due to official engagement the CFO had not appeared and PIA management provided evidence for income tax matters, which resulted in present recovery demand.