The Federal Board of Revenue has granted Pakistan International Airlines Corporation Limited an income tax exemption on default surcharge and penalties tied to its current income tax liabilities of Rs. 8.765 billion, according to an official notification issued on Tuesday.
The exemption was announced through S.R.O. 799(I)/2026 under Section 183 of the Income Tax Ordinance, 2001. The decision follows approval by the federal cabinet on December 31, 2025.
According to the notification, the tax relief is intended to facilitate the successful completion of PIACL’s divestment process by helping ensure the timely execution of bid documents and related terms with the successful bidder.
Under the terms of the exemption, PIACL will still be required to pay its current tax liabilities of Rs. 8.765 billion, calculated as of June 30, 2025, to the FBR within four years from the first completion date defined in the Share Purchase and Subscription Agreement signed between the government and the successful bidders.
The repayment plan includes a one-year grace period, after which the outstanding amount will be paid in equal annual installments.
The move is seen as part of broader efforts to remove financial hurdles in the way of the airline’s privatization process and make the transaction smoother for prospective investors.
