ISLAMABAD: Economic Co-ordination Committee of the Federal Cabinet has allowed Pakistan International Airlines to pay taxes on leased aircraft on monthly instalment, official sources said.
Sources said the ECC in its meeting on December 3, 2013 regarding critical liquidity condition of PIA, was informed that the corporation has bought 10 narrow body aircraft, at a cost of $64.8 million, including taxes. The amount without tax would be $30 million which implied that the taxes were more than the actual project cost. The view of PIA was that they were not liable to pay tax on leased aircraft.
The meeting was informed that in the said case, it was earlier proposed that FBR be asked to release the aircraft upon arrival pending payment till the resolution of the issue of payment of taxes on leased aircraft between PIA and the FBR.
The meeting had, however, observed that total duty exemption was not possible because such exemptions were required to be across the board and temporary import also entailed import duty. The Aviation Division proposed that in order to settle the issue with tax authorities, ECC may allow payment of the said taxes on monthly instalments. FBR chairman concurred with the proposal. After detailed discussions, ECC approved payment of taxes on leased aircraft on monthly instalments.