IMF agrees to waive GST on new planes if PIA privatized

The IMF has agreed to waive the 18% GST on new aircraft induction if Pakistan International Airlines (PIA) is privatized, the privatization commission chairman informed a parliamentary committee.

The government plans to issue an Expression of Interest (EoI) this month to sell a 51-100% stake in the debt-ridden airline as part of a $7 billion IMF-backed reform plan.

“In the previous round, bidders recommended waiving the 18% GST imposed by the government on the induction of new planes and fleet expansion,” the privatization commission chairman told the National Assembly Standing Committee on Privatization on Monday, according to a press release.

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“They believed that removing this tax would facilitate new aircraft acquisitions and support the growth of the aviation industry.”

PIA’s losses exceed $3 billion, with assets valued at $572 million. Concerns from potential buyers include policy continuity, contract enforcement, and sector taxation. The government is formulating a strategy to manage PIA’s Rs45 billion ($162 million) liabilities.