PIA to Get Sales Tax Exemptions on Aircraft Imports

The federal government has declared the implementation of sales tax waivers on aircraft acquisitions and leasing for Pakistan International Airlines (PIA). This initiative is intended to assist the national carrier’s privatization efforts.

The proposed exemption, detailed in the federal budget for 2025-26, eliminates sales tax liabilities for PIA on both aircraft imports and lease arrangements. This measure offers significant monetary assistance to the financially challenged national flag carrier.

The scope of the exemption extends beyond aircraft to encompass a broad spectrum of aviation-related supplies and equipment.

The tax relief will apply to seven vital categories of aviation imports, all of which will benefit from a zero percent customs duty rate. These include:

  • Complete aircraft acquired through import, wet lease, or dry lease arrangements
  • Spare components for aircraft and simulators
  • Maintenance packages for trainer aircraft
  • Specialized machinery and equipment for Maintenance, Repair, and Overhaul (MRO) activities
  • Aviation simulators
  • Aircraft engines
  • Operational instruments for new airport infrastructure

Specifically for PIA, the aircraft import exemption has been retrospectively applied to March 19, 2015. This could potentially provide retroactive advantages for the airline’s fleet additions made over the last decade.