Pakistan International Airlines Corporation Limited (PIACL) has received significant tax relief after the Federal Board of Revenue (FBR) approved a waiver of Rs4.293 billion in default surcharges and penalties linked to the airline’s current income tax liabilities.
The decision comes shortly after Lt Gen (retd) Anwar Ali Hyder became the first chairman of the newly privatized PIACL. The appointment followed the transfer of the airline’s management control to the Arif Habib Corporation-led consortium.
The latest move is expected to support the ongoing privatization process while helping the successful completion of the agreed transaction.
FBR Waives Rs4.293 Billion in Tax Penalties
The Federal Board of Revenue issued SRO 1129(I)/2026, granting PIACL exemption from default surcharges and penalties on its current income tax liabilities.
According to the notification, the waiver covers Rs263.82 million in default surcharges and penalties related to withholding tax, excluding salary-related taxes, for the period between April and December 2024.
In addition, the exemption includes Rs4.03 billion in penalties associated with advance income tax covering the period from May 2024 to June 2025.
As a result, the total relief granted amounts to Rs4.293 billion.
Tax Liabilities Still Subject to Final Assessment
Although the penalties have been waived, the underlying tax liabilities have not been cancelled.
Instead, the notification states that the current tax liabilities remain subject to final determination under the applicable legal process.
Therefore, PIACL will still be required to settle its tax obligations once the assessment process concludes.
Relief Linked to Privatization Process
The tax waiver has been granted to facilitate the successful completion of PIACL’s divestment process.
Furthermore, the decision aims to support the timely execution of bid documents and fulfill commitments agreed upon between the government and the successful bidder.
The exemption forms part of the broader framework established for the airline’s privatization.
Payment Schedule Included in FBR Conditions
The FBR attached specific conditions to the exemption.
Under the approved arrangement, PIACL must pay its current income tax liabilities over four years after a one-year grace period.
The payments will be made in equal annual installments following the First Completion, as defined in the Share Purchase and Subscription Agreement signed between the Government of Pakistan and the successful bidder.
Consequently, the airline will remain responsible for meeting the agreed payment schedule while benefiting from the waiver of default surcharges and penalties.
New Chairman Takes Charge Following Management Transfer
The FBR’s decision comes nearly two weeks after Lt Gen (retd) Anwar Ali Hyder assumed the role of chairman of the newly privatized PIACL.
His appointment followed the transfer of management control to the Arif Habib Corporation-led consortium.
The latest tax relief represents another important step in the implementation of the privatization agreement. It also supports the financial framework agreed upon during the transaction while setting clear conditions for future tax payments.
