Islamabad, Dec 14: The International Monetary Fund (IMF) approved a remission of the Federal Excise Duty (FED), which might result in a considerable drop in the price of international tickets for Pakistan International Airlines (PIA).
The Pakistani government requested the waiver, and the IMF granted it, according to sources at the Privatization Commission (PC). Passengers may save up to Rs. 350,000 on flights to the USA as a result of this action, which could result in significant savings. Flights to Europe, Australia, New Zealand, and the Far East may save up to Rs. 210,000, while those to Africa and the Middle East may see costs drop by as much as Rs. 105,000.
It’s crucial to remember that only international PIA tickets are eligible for the FED waiver. The significant increase in Federal Excise Duty (FED) on air travel of Rs. 56 billion, which was first imposed in the 2024 budget, has now been partially reversed.
According to PC officials, the IMF has allowed Pakistan to avoid paying the 18% sales tax on new aircraft purchases or leases. The IMF has also consented to transfer Rs. 46 billion of PIA’s negative equity to a holding company in order to strengthen the airline’s financial position. It is anticipated that this action will lower operating expenses and increase PIA’s appeal to possible investors.
The government’s resolve to privatization PIA has been underlined by officials. The federal government is changing rules to enable bidders to vie for a 60% share in the airline in order to make this possible.
