On Wednesday, the Federal Board of Revenue took action by freezing the bank accounts of Pakistan International Airlines (PIA) due to the airline’s failure to settle tax obligations amounting to billions, according to sources.
PIA, the national flag carrier, reportedly owes approximately Rs4.5 billion in taxes and has neglected to file tax returns since February of the current year. Simultaneously, the Pakistan State Oil (PSO) has demanded an immediate payment of Rs1.5 billion from PIA, threatening to cease fuel supplies to its aircraft if the dues are not cleared.
Amidst accumulated losses and liabilities amounting to billions of dollars, the caretaker government asserts its inability to continue funding PIA. A longstanding dispute with PSO revolves around payment issues.
In September, in a purported effort to support the national carrier, PSO extended a credit facility of Rs500 million ($1.82 million), acknowledging PIA’s outstanding balance of Rs26.8 billion ($97.37 million).
This freeze on PIA’s accounts by the FBR is the second occurrence in five months, underscoring the airline’s persistent challenges in meeting its tax obligations. In July of this year, FBR sources revealed that PIA owed Rs4 billion in taxes, funds that had already been collected from customers as Federal Excise Duty but were never remitted to the tax body.