ISLAMABAD, May 4, 2026 – The Federal Board of Revenue (FBR) has announced a waiver of penalties and default surcharge on tax liabilities amounting to Rs8.77 billion payable by Pakistan International Airlines (PIA).
According to a notification issued on Monday, the FBR stated that the decision was taken under Section 183 of the Income Tax Ordinance, 2001, and in line with a federal cabinet decision dated December 31, 2025.
The federal government has exempted default surcharge and penalties on PIA’s current tax liabilities totaling Rs8,765,972,000, subject to final determination. The move is aimed at facilitating the successful completion of the airline’s divestment process to prospective buyers and ensuring timely execution of bid-related agreements.
Officials said the relief is part of broader efforts to streamline the privatization of the national carrier, which has faced persistent financial challenges in recent years.
The FBR further clarified that the waiver is conditional. PIA must settle its outstanding tax liabilities—recorded as of June 30, 2025—within four years. The repayment plan includes a one-year grace period, after which the amount will be paid in equal annual installments.
The payment schedule will commence following the “First Completion” stage, as defined in the Share Purchase and Subscription Agreement between the Government of Pakistan and the successful bidder.
Analysts view the development as a key step toward reducing PIA’s financial burden and improving its attractiveness to investors during the privatization process.