All of Pakistan International Airlines (PIA) bank accounts have been frozen by the Federal Board of Revenue (FBR) because the company has not paid its federal excise fee. This action has made things worse for the national flag carrier, which has been having major money problems for a few years now.
Officials from the FBR say that PIA owes more than Rs55 billion in federal excise tax until September 2023. PIA has not settled this task, even after being told several times. Also, they haven’t made their tax returns for October 2023 yet, so they don’t know how much tax they owe for that month.
The Large Taxpayers Unit (LTU), which is a branch of the FBR in Karachi, blocked all of PIA’s bank accounts to get these tax debts paid. A sum of Rs1.5 billion has already been found and put into the national budget. Banks have been told to move any money that comes into PIA’s accounts right away to the FBR’s reserve accounts.
Recent news reports say that PIA hasn’t made returns since February of this year and must pay Rs2.77 billion right away as ordered by a tribunal. Accounts were frozen two days before the end of the month, which is different from how things usually work, when they happen on the last day of the month.
Last month, PIA had to cancel or delay many flights because it owed money to Pakistan State Oil (PSO), the state’s oil marketing business. Bloomberg reported that PIA’s debts are Rs743 billion, which is about $2.5 billion. This is five times more than its estimated assets.
As The Express Tribune reported on October 14, PIA asked banks for more loans totaling over Rs7 billion because they were worried that flights might have to be canceled during a serious financial crisis. The airline has asked the Aviation Division for emergency loans, including a way to get Rs7.5 billion that is backed by the government.
