Pakistan approves 15-year sales tax exemption for airlines
Pakistan’s National Assembly Standing Committee on
Privatization has approved a proposal granting airlines a 15-year exemption
from sales tax on imported goods, a move expected to reduce operating costs and
support fleet modernization across the country’s aviation sector.
The proposed exemption would apply to all airlines
operating in Pakistan, including the national flag carrier, Pakistan
International Airlines (PIA). According to local media reports, the measure is
expected to take effect from the upcoming federal budget, subject to formal
approval and implementation.
The decision was taken during a committee meeting at
Parliament House in Islamabad chaired by MNA Muhammad Farooq Sattar. The
meeting also considered matters related to the privatization of several
state-owned entities.
Read More Pakistan
extends sales tax relief on aircraft imports to all registered airlines
Under the proposed tax relief, airlines would benefit
from lower costs on imported aircraft components, ground-handling equipment and
other essential aviation supplies. Industry observers expect the measure to
ease financial pressures on carriers and potentially improve their ability to
invest in aircraft maintenance and fleet renewal.
The tax exemption could also support efforts by PIA and
other Pakistani airlines to modernize their fleets, expand operations and
strengthen international connectivity. The sector has faced significant
financial and operational challenges in recent years, including aging aircraft
and high operating costs.
The proposal comes as PIA moves forward under private
ownership following its privatization. The new ownership structure is expected
to focus on fleet renewal, operational improvements and the expansion of
domestic and international routes.
A more favorable import-tax regime could provide
additional support for those objectives by reducing the cost of acquiring
aircraft-related equipment and other aviation necessities.
The committee’s meeting also discussed the proposed
privatization of Zarai Taraqiati Bank Limited and power distribution companies
(DISCOs). Members emphasized the importance of transparency and due diligence
in future privatization transactions and called for the protection of
employees’ rights in accordance with applicable laws.
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denies exemption to Ministry of Aviation for Islamabad Airport outsourcing
While the committee has approved the proposed 15-year sales tax exemption, a
specific implementation date has yet to be announced. The measure is expected
to be incorporated into the next federal budget before taking effect.
Source:
The Bangladeshi Monitor