IMF agrees to Pakistan’s demands for PIA privatisation

ISLAMABAD: The International Monetary Fund (IMF) has agreed to the exemptions of sales tax and settlement of equity losses for the Pakistan International Airlines (PIA) privatisation.

According to sources, the buyer of PIA will be granted sales tax exemptions for purchasing or leasing aircraft for both national and international routes, which could increase bidding for PIA to Rs350 billion.

The national flag carrier currently has a debt of around Rs660 billion, which the government has assumed responsibility for and stockpiled under a holding company.

Additionally, sources also revealed that the IMF has approved the settlement of PIA’s holding company debt.

For the Roosevelt Hotel sale, a joint venture is expected to be established within six months, with an estimated sale value of up to $one billion. The Prime Minister has also been briefed about the tax exemptions for PIA, the removal of losses, and the joint venture for the Roosevelt Hotel sale.

Initially, the IMF had only approved sales tax exemptions for the purchase or lease of aircraft for international routes. However, after further negotiations, the exemption has also been extended to aircraft purchases or leases for domestic routes.