Privatization Commission Rejects Bidders Request to Exempt FED on PIA Tickets 

The Privatization Commission has reportedly rejected request by bidders to exempt Federal Excise Duty (FED) on tickets of Pakistan International Airlines (PIA).  Sources said that bidders asked the government to exempt excise duty on tickets; however, the government did not entertain the proposal citing the reason that the IMF has barred Pakistan from giving tax exemptions.  Reportedly, the government has already extended the financial bidding date of PIA privatization to Oct 31 from Oct 1, 2024, as the bidders wanted more time before taking part in the process.  It is pertinent to mention here that the government increased the excise duty on all categories of tickets in FY25 budget.  Sources said that bidders have also asked the government to consider a 5-year installment plan with a one to two years moratorium on overdue tax payments to PIACL post-privatization.  In addition, they had also asked the government to consider providing an indemnity to the purchaser covering all legal and tax litigations/claims prior to closing.  Furthermore, the prequalified bidders also asked the government to consider three to five years of General Sales Tax (GST) exemption on aircraft inductions or consider restructuring GST payments on aircraft in installments over the lease term.  Sources said that the government has rejected the proposals except for the installment plan for pending dues.  The PC on the advice of FBR communicated to bidders that they could get approval for the installment of pending dues to apply to the concerned tax commissioner.  The Privatization Commission had prequalified six bidders in June 2024 to bid for a 60 percent stake in PIA.