Successful negotiations: FBR restores PIA bank accounts

ISLAMABAD: In a breakthrough development, talks between the Federal Board of Revenue (FBR) and Pakistan International Airlines (PIA) have resulted in the restoration of all of PIA bank accounts.

The FBR had previously frozen these accounts in response to the national flag carrier’s non-payment of federal excise duty, compounding the financial challenges faced by PIA amid a prolonged period of fiscal turmoil.

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FBR officials revealed that PIA’s outstanding federal excise duty, accumulating until September 2023, exceeded Rs55 billion. Despite repeated notices, PIA had been unable to settle this obligation. Furthermore, the tax liabilities for October 2023 remained unresolved, pending the filing of tax returns for that month.

The freezing of all PIA bank accounts was executed by the FBR’s subsidiary, the Large Taxpayers Unit (LTU) in Karachi, as a measure to recover the outstanding tax liabilities.

On Thursday, a PIA spokesperson announced the successful resolution of the matter through negotiations with the FBR. The spokesperson highlighted the continuous communication between PIA and FBR’s Large Tax Unit throughout the process.

Notably, an amount of Rs1.5 billion has already been recovered and deposited into the national treasury.

Instructing banks to promptly transfer any funds received in PIA’s accounts to the FBR’s treasury accounts, this development marks a significant step toward resolving PIA’s financial woes and fostering cooperation between the national carrier and tax authorities.

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.