The Federal Board of Revenue (FBR) has frozen all of Pakistan International Airlines’ (PIA) bank accounts due to non-payment of federal excise duty. This action has exacerbated the problems faced by the national flag carrier, which has been struggling with serious financial crises for several years.
According to FBR officials, PIA’s liabilities exceed Rs55 billion in federal excise duty until September 2023. Despite repeated notices, PIA has failed to settle this duty. Additionally, their tax liabilities for October 2023 remain undetermined as tax returns for that month are yet to be filed.
All of PIA’s bank accounts were frozen by the FBR’s subsidiary organization, the Large Taxpayers Unit (LTU) in Karachi, to recover these tax liabilities. An amount of Rs1.5 billion has already been recovered and deposited into the national treasury. Instructions have been given to banks to immediately transfer any funds received in PIA’s accounts to the FBR’s treasury accounts.
Recent reports indicate that PIA has not filed returns since February of this year and is required to promptly pay Rs2.77 billion following a tribunal’s order. This freezing of accounts occurred two days prior to the month’s end, a departure from the usual practice of such actions taking place on the month’s last day.
Last month, PIA had to cancel or delay numerous flights due to unpaid dues to the state’s oil marketing company, Pakistan State Oil (PSO). A report from Bloomberg indicated that PIA’s liabilities amount to Rs743 billion (approximately $2.5 billion), surpassing its total assets by five times.
As previously reported on October 14 by The Express Tribune, PIA requested an additional borrowing of over Rs7 billion from banks due to concerns about potential suspension of flight operations amidst a severe financial crisis. The airline has approached the Aviation Division for immediate loans, including a government-guaranteed option for securing Rs7.5 billion.