In light of Pakistan International Airlines’ (PIA) financial situation and cash flow issues, the Federal Board of Revenue (FBR) has de-attached its bank accounts.
The PIA currently pays the FBR Rs. 1.3 billion each month under the Federal Excise Duty (FED) heading, but the remaining balance that needs to be paid by the PIA is currently over Rs. 8 billion.
Cashflow problems are making it difficult for PIA to pay taxes that are due, and officials from both FBR and PIA are addressing this issue. FBR’s bank accounts, which had recently been frozen due to a default in fulfilling obligations, have since been unfrozen.
As the airline must immediately pay at least $100 million to the roughly half a dozen leasing companies it hired for the chartering of aircraft, airport authorities, aircraft spares, and other services, its financial situation remains dire.
The national flag carrier has largely survived on recurrent government bailouts and recently received a support commitment. Liabilities for the company have increased to Rs. 743 billion ($2.5 billion), which is more than five times their total assets.
