Fresh Invitation for Expression of Interest to be Issued Soon for PIA Privatization

[Abbas Ali]

PTV News

New invitation for Expression of Interest (EoI) to be Issued soon this month for PIA Privatization. This was disclosed during National Assembly Standing Committee on Privatization meeting held in Islamabad on January 9.

The committee was informed that International Monitory Fund (IMF) agreed for the removal of 18% General Sales Tax (GST) on aircraft acquisition and cleaning of PKR 45 billion negative equity of Pakistan International Airlines Corporation Limited (PIACL). PIACL liabilities has been transferred to PIA Holding Company Limited (PIAHCL). The airline will be offered without liabilities to bidders.

The committee was further informed that it was decided to capitalize on positive momentum generated by IMF consent, resumption of PIA flights to Europe and to avoid further loss to national exchequer; it was decided to go for fresh Expression of Interest (EoI) at the earliest.

Ernst & Young (EY) has been retained as financial advisor for PIA privatization process.

Abbas

[Amaad Lone]

is the 18% sales tax on lease payments removed for all airlines or just PIA??

[Abbas Ali]

Privatization Commission planning to publish Expression of Interest (EoI) for privatization of Pakistan International Airlines Corporation Limited (PIACL) by the end of current month (January).

https://epaper.brecorder.com/2025/01/14 ... -news.html

[arshad.altaf]

Govt gets another shot at PIA sale

The lack of interest shown by the buyers during the first round of privatisation was due to multiple reasons, including the 18 per cent GST on the purchase of new aircraft and the national carrier’s liabilities.

The National Assembly Stan­ding Committee on Privatisation was informed on Monday that the government had removed 18pc GST on the purchase of new aircraft in a bid to spur investors’ interest.

The Privatisation Commission chairman informed the committee that the IMF agreed to remove the tax after the government presented its concerns.

https://www.dawn.com/news/1889635/govt- ... t-pia-sale

[Sami Warsi]

Waste of time and money

[Abbas Ali]

Government of Pakistan has decided to issue an Expression of Interest (EoI) this month to privatize Pakistan International Airlines (PIA) in a new effort which will present the airline with a clean balance sheet and exempt the buyer from 18 percent General Sales Tax (GST) on aircraft induction. These measures have been approved by the International Monetary Fund (IMF).

The exemption of 18% GST on aircraft induction will be made available to Pakistan's entire aviation industry after the privatization of PIA to help private airlines in expanding and improving their business and services.

Abbas

[Karachi Aviator]

Government of Pakistan has decided to issue an Expression of Interest (EoI) this month to privatize Pakistan International Airlines (PIA) in a new effort which will present the airline with a clean balance sheet and exempt the buyer from 18 percent General Sales Tax (GST) on aircraft induction. These measures have been approved by the International Monetary Fund (IMF).

The exemption of 18% GST on aircraft induction will be made available to Pakistan's entire aviation industry after the privatization of PIA to help private airlines in expanding and improving their business and services.

Abbas

Exemption of the 18% GST won't really be a major factor to attract bidders. I mean how often do Pakistani airlines and PIA specifically induct new aircrafts?, though it's still better than having nothing. The main thing here is the clean balance sheet. Wonder if they are selling 100% or still just the 51%

Nonetheless, the government should go to the interested parties and ask for their concerns rather making efforts which are based on government's own approximations and assumptions.

[Abbas Ali]

18% General Sales Tax (GST) is also applied on used aircraft acquired on dry lease by airlines in Pakistan. It is applied on aircraft lease term total value and airlines have to make advance payment in lump sum.

In year 2022, when 17% GST was applied, PIA sought permission to make GST payment in installments for four used Airbus A320 aircraft acquired by the airline on dry lease for six years.

https://www.brecorder.com/news/40179851

GST was raised to 18% from 17% in February 2023.

In the first attempt to privatize PIA, serious bidders with aviation industry experience had demanded an exemption from 18% GST on aircraft induction and removal of liabilities from PIA balance sheet. Apparently, all these serious parties did not take part in final bidding process when their demands were not accepted by the government in the first attempt to privatize PIA.

Abbas

[Abbas Ali]

Expression of Interest (EoI) for the privatization of PIA to be issued on April 24.

https://www.express.pk/story/2758382/pi ... ns-2758382

[Amaad Lone]

18% sales tax on aircraft lease payments or even purchase price is criminal.

you are talking about 150 million dollar jets and paying 27 million dollars as sales tax. At a time when the airlines are heavily taxed on fuel and other equipment I think this policy would be the nail in the coffin.

such taxes only encourage under invoicing, and tax evasion.

Which idiot came up with this policy.