Latest IMF Approval Clears the Way for PIA Privatization
The International Monetary Fund (IMF) approved the removal of an 18% sales tax on leased aircraft for Pakistan International Airlines. This is a very significant decision that is likely to remove one of the critical hurdles in the privatization of the struggling national airline, which has been recording losses for years.
This is in the wake of the controversy that surfaced recently after a real estate tycoon surprised everyone by tendering an unusually low Rs. 10 billion bid for a 60% share of PIA back in October 2024. According to sources, Ishaq Dar was informed of this during his last meeting, where he was assured that the green light from the IMF would mean investors would not be required to pay the sales tax of 18% on the new aircraft.
The IMF’s move comes after earlier requests by potential bidders for it to also forgive Rs. 45 billion in outstanding PIA debts.
The process of privatization, which had included the transfer of Rs. 623 billion of liabilities of PIA to a holding company, can now go ahead without any major hurdles. The finance ministry also emphasized the need for foreign investment to be drawn into the airline for revival.
