PIA assures FBR of clearance of all dues by June

Pakistan International Airlines (PIA) has given assurance to the Federal Board of Revenue (FBR) to pay off all pending tax dues amounting to Rs 3.7 billion by June 2017, it was learnt. According to the sources, the top management of airline held a meeting with the tax officials of Large Taxpayers Unit (LTU)-I on the other day and assured that the national flag carrier would pay off pending Federal Excise Duty (FED) amounting to Rs 3.7 million till June 2017and also guarantee smooth monthly FED payment of Rs 800 million.
Sources said the meeting was convened in milieu with a letter sent by the LTU-I, Karachi on December 1, 2016 to the International Air Transport Association (IATA) Pakistan, informing the association that around Rs 3.7 billion FED, which had been accumulated for the tax periods from July 2013 to September 2016, was recoverable from PIA, which was collected but not deposited to the national kitty.
They said the large revenue collecting arm of FBR asked IATA Pakistan to direct its present and future proceeds from Billing and Settlement Plan (BSP) of the association to the government treasury would be made in favour of tax department till further instruction.
In response to the said decision taken by the LTU-I, Karachi, the top management of airline held a meeting with the tax officials and assured them that the national flag carrier would not only discharge pending FED amounting to Rs 3.7 million till June 2017 but also ensure paying Rs 800 million as monthly regular payment, sources said, adding the tax department after the said assurance had now withdrawn its letter sent to the IATA.
Replying to a question, sources said the national flag carrier had to collect Rs 10,000 FED from international business class passengers, Rs 5,000 from economy class passengers and Rs 2,500 from domestic passengers and liable to deposit the same into national kitty within 45 days.
However, the airline despite collecting Rs 8 billion from international and domestic passengers did not deposit the same for the period 2010 to 2013, they said. Moreover, sources said that in 2013, the tax department had attached 15 bank accounts of the airlines in order to recover Rs 25 billion including Rs 8 billion principle amount and rest of it as fine and penalty but the Economic Co-ordination Committee (ECC) in its meeting held on July 18, 2013 restrained the LTU, Karachi from tax recovery exercise and ordered to de-attach all airline's bank accounts.
They answered that around Rs 3.7 billion FED was accumulated after the said decision and the tax department was now contemplating to challenge the ECC decision. Furthermore, sources said that tax department had adopted aggressive strategy to streamline the airline sector, resulting 44 percent growth in revenue collection last tax year. When contacted, PIA spokesman denied any correspondence with FBR to settle pending tax issues.