Recovery of Outstanding Tax Amount From PIA
Recovery of Outstanding Tax Amount From PIA: The Federal Board of Revenue (FBR) recovered around one billion rupees in outstanding tax amount from ailing state-owned Pakistan International Airlines (PIA) through drawing it from an international funds transfer to the airline.
The airline’s spokesman said he doesn’t have knowledge of the tax recovery, but he accepted that there were tax nonpayment issues.
Large Taxpayers Unit (LTU) Karachi recovered Rs.970 million from the airline, the officials said.
Tax officials said the national flag carrier is tax defaulter of Rs.2.5 billion for the two months under the head of federal excise duty collected from passengers on air tickets. The amount was not transferred to the FBR, they added.
Last week, the LTU wrote a letter to the International Air Traffic Association (IATA), seeking tax recovery from the payment made to the PIA every two months in lieu of interline transactions between the world’s airlines, aviation companies and travel partners.
The FBR’s largest tax collection department asked IATA Pakistan to deposit PIA’s present and future proceeds from billing and settlement plan (BSP) to the government treasury through pay order/demand draft in favour of LTU Karachi.
“Till further instructions, no BSP proceeds for IATA settlement should be directed to PIAC till the recovery of the amount,” the department said in the letter.
Tax officials said failure of non-payment of federal excise duty is the violation of the Federal Excise Act 2005. In 2013, the Economic Coordination Committee of the cabinet made it mandatory for the PIA to deposit the duty into the government treasury on fortnightly basis.
PIA has been incurring losses for the last couple of years. It incurred Rs26 billion and Rs32 billion in losses alone in 2017 and 2016, respectively.
Previous government had attempted to privatise the loss-making airline, but opposition parties opposed the privatisation efforts.
PIA spokesman Mashood Tajwar said he was unaware about the recovery.
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