The Federal Board of Revenue (FBR) on Thursday withdrew its orders to freeze the Pakistan International Airlines’ bank accounts but at the same time clarified that these directives did not bar it from pursuing recovery proceedings.
The national carrier has been lately embroiled in a financial crisis. On Wednesday, the FBR had frozen 28 PIA accounts. Additionally, Pakistan State Oil had threatened to stop the airline’s oil supply if outstanding dues were not settled.
These actions came at a time when a team from the European Union’s Aviation Safety Agency (EASA) was in Pakistan to assess issues related to flight safety.
The EASA had barred PIA from operating flights to Europe after a plane crashed in Karachi on May 22, 2020. The restrictions were imposed in light of an explosive claim by former aviation minister Ghulam Sarwar Khan in parliament that 40 per cent of Pakistani pilots had questionable qualifications.
In a notification today, the FBR’s deputy commissioner for Inland Revenue said: “This office has been directed to withdraw the notice mentioned above and to de-attach the bank accounts of the subject taxpayer with immediate effect.”
However, the board highlighted that the said de-attachment did not bar the department from pursuing “recovery proceedings” under Section 14(3) of the Federal Excise Act, 2005. The law pertains to the recovery of “unpaid duty or of erroneously refunded duty or arrears of duty”.
As the national flag carrier is experiencing billions of rupees in losses, the government has announced privatisation plans for the debt-ridden PIA along with outsourcing airport operations.
Last month, PIA’s fortunes plummeted to an all-time low when its operations grounded to a halt after PSO cut the carrier’s fuel supply over mounting unpaid dues. Over 500 flights were cancelled in two weeks.
Although the operations were later restored, the government has now stepped up on its decisions regarding the airline’s future.
Last week, the PIA chief executive cancelled scheduled off days on Saturday and Sunday and instructed senior officials to report to their offices, along with the relevant departmental general managers and their teams, to complete tasks pertaining to the carrier’s divestment process.