Pakistan's tax agency, the Federal Board of Revenue (FBR) has seized PKR1.3 billion Pakistani rupees (USD4.5 million dollars) from the bank accounts of PIA - Pakistan International Airlines (PK, Islamabad International), resulting in the airline been unable to process some payroll obligations.
According to multiple reports, the FBR is owed approximately PKR3 billion (USD10.4 million) by PIA - Pakistan International Airlines. In addition to taking the tranche of cash last week, the tax agency has reportedly given the airline seven days to pay the remaining PKR1.7 billion (USD5.9 million) owed.
The seized funds were earmarked to cover the March salaries of a cohort of PIA employees, including some pilots. While employees in pay groups one to four did receive their March salaries (albeit late), employees in pay groups five to ten remain unpaid because of the FBR's action. Those employees are now threatening to strike ahead of the airline's peak Eid al Fitr holiday period.
In late February, ch-aviation reported that the FBR had frozen PIA's bank accounts due to overdue tax debts of PKR2.86 billion (USD9.92 million). That freezing order was lifted after the airline agreed to make a part payment of PKR500 million (USD1.74 million). PIA also had its bank accounts temporarily frozen in early 1Q 2022 when it owed the tax agency PKR2.6 billion (USD9 million). In the 15 months since then, the airline's tax liability has increased rather than decreased.
Meanwhile, PIA - Pakistan International Airlines has also applied to the Pakistan Stock Exchange (PSX) for a 30 day extension to hold its 2022 annual general meeting and submit its audited financial statements for the year. In an April 10 filing, PIA asked for a new deadline of May 30, 2023, citing fieldwork delays at the two accounting firms charged with preparing the reports.
