ISLAMABAD – The International Monetary Fund (IMF) accepted the demands for sales tax exemptions and the removal of equity losses for the privatization of PIA, the sources said on Tuesday.
The buyer of PIA would receive a sales tax exemption for purchasing or leasing aircraft for both national and international routes.
As a result, with the sales tax exemption and the elimination of losses, the bidding price could range from 250 billion to 350 billion rupees.
The government took on the PIA’s debt of approximately 660 billion rupees and parked it in a holding company. Additionally, the funds generated from the privatization of PIA and the sale of the Roosevelt Hotel will be used to settle payments.
The sources said that the IMF had also approved the settlement of the PIA holding company’s debt. A joint venture, he said, is expected to be set up within six months to sell the Roosevelt Hotel, with an estimated sale value of nearly one billion dollars.
In this regard, the PM had been briefed on the tax exemptions for PIA, the elimination of losses and the joint venture for the sale of the Roosevelt Hotel.
The sources further mentioned that initially, the IMF only allowed a sales tax exemption for the purchase or lease of aircraft for international routes. However, after submitting a new request, the IMF also granted sales tax exemptions for purchasing and leasing aircraft for domestic routes.
The PIA would be able to benefit from sales tax exemptions of up to approximately 8.1 million rupees per month for leased aircraft.
