Pakistan International Airlines (PIA) has its bank accounts frozen due to unpaid taxes to the tune of $9.8 million. The airline owes taxes to Pakistan's Federal Board of Revenue (FRB) and had its accounts frozen many times in the past, most recently this February, but the accounts were unblocked within the span of next few days.
The airline was told to pay approximately $9.8 million in taxes to the FRB, however, PIA disputes the amount, claiming it only owes $4.5 million, Dawn reports citing source close to the airline.
The cash-strapped airline has faced this issue many times in the past due to issues like rising fuel costs and mismanagement of funds, leading to its bank accounts being frozen by the FRB on multiple occasions.
The latest incident was in February 2023, when there were talks of an arrest of PIA’s managing director if the funds were not paid. PIA ended up paying a percentage of funds and accounts were unblocked.
PIA was granted $14 million by the Pakistan government in June 2023 to help it pay off loans and improve cash flow on top of the $52.5 million awarded in the 2022/23 budget. In fact, PIA had asked for $157.1 million but was granted only a fraction of this.
Pakistan's Aviation Minister Khawaja Saad Rafique is seeking to implement restructuring PIA by splitting it into two entities and attracting private investment. PIA's Officer's Association has rejected the proposal, instead requesting an immediate salary increase for the airline's employees.