IMF Agrees to Key Demands Regarding Sale of PIA

The International Monetary Fund (IMF) has agreed to demands for sales tax exemptions and the elimination of equity losses to facilitate the privatization of Pakistan International Airlines (PIA), sources told ProPakistani. Sources said that PIA’s buyer will be granted sales tax exemptions for purchasing or leasing aircraft for both national and international routes. With the sales tax exemption and elimination of losses, the bidding value for PIA could increase from Rs. 250 billion to Rs. 350 billion. Approximately Rs. 660 billion of PIA’s debt has been taken over by the government and transferred to a holding company. The proceeds from PIA’s privatization and the sale of the Roosevelt Hotel will be used to settle outstanding payments. The IMF has also approved the settlement of the holding company’s debt. A joint venture is expected to be established within six months for the sale of the Roosevelt Hotel, with an estimated value of around $1 billion, as per sources. The Prime Minister has been briefed on tax exemptions for PIA, the elimination of losses, and the joint venture for the sale of the Roosevelt Hotel. Initially, the IMF had only allowed sales tax exemptions for the purchase or lease of aircraft for international routes. Upon a renewed request, the exemption was extended to include the purchase or lease of aircraft for domestic routes as well. PIA’s leased aircraft will now benefit from a monthly sales tax exemption of approximately Rs. 8.1 million.