Lawmakers Back Incentive Package to Support Sale Process
ISLAMABAD: The National Assembly Standing Committee on Finance has approved a proposal granting Pakistan International Airlines (PIA) a 15-year tax exemption on the import of new aircraft and spare parts, a move aimed at supporting the airline’s ongoing privatization process.
During a committee meeting, officials from the Privatization Commission informed lawmakers that all four bidders participating in the privatization process had requested tax relief on specific imports. According to officials, the proposed agreement includes exemptions on nine designated categories of imported items considered essential for the airline’s future operations and fleet modernization.
Committee members reviewed the proposal as part of broader discussions on measures designed to make the privatization package more attractive to potential investors and ensure the successful completion of the transaction.
Officials Warn Against Reversing Approved Incentives
Committee Chairman Naveed Qamar questioned the duration of the tax exemption and sought clarification regarding its long-term impact on the aviation sector. In response, the Secretary of the Privatization Commission stated that both the government and Parliament had already approved the 15-year relief package.
He further explained that the incentive was not exclusive to PIA and that similar concessions could be extended to other entities if policymakers considered it necessary in the future.
Meanwhile, Qamar noted that withdrawing the exemption at this stage could negatively affect the privatization process and potentially discourage investors.
Government Links Relief to Privatization Success
Finance Secretary Imdad Ullah Bosal cautioned lawmakers that reversing the approved tax relief could jeopardize the privatization deal. He added that any attempt to alter the arrangement would require approval from the International Monetary Fund (IMF), which could prove difficult to secure.
Additionally, Minister of State for Finance Bilal Azhar Kayani told the committee that concerns raised by other airlines regarding comparable tax incentives would be discussed with the IMF during future consultations.
Government officials expressed confidence that the approved relief package would strengthen investor interest, support fleet expansion plans, and improve the prospects of successfully privatizing the national carrier.
