Pakistan’s Senate Standing Committee on Finance has opposed a proposal to grant an Aircraft Tax Exemption exclusively to Pakistan International Airlines Corporation Limited (PIACL), arguing that such relief should be available to all airlines operating in the country.
The committee reviewed recommendations related to the Finance Bill 2026-27 and completed its clause-by-clause examination of proposed amendments to the Sales Tax Act and the Federal Excise Act.
During the meeting, committee members raised concerns over a plan that would exempt PIACL alone from sales tax on the import of aircraft and aviation parts. The committee said limiting the benefit to a single airline could create an uneven playing field within Pakistan’s aviation sector.
Committee Chairman Senator Saleem Mandviwala strongly opposed the proposal. He stated that granting tax relief to only one airline would amount to discrimination against other carriers. He also warned that such a move could lead to legal challenges from airlines excluded from the exemption.
The committee urged expanding the Aircraft Tax Exemption to all eligible airlines, not just PIACL.
Finance Minister Muhammad Aurangzeb responded by explaining that the exemption was proposed in connection with PIACL’s ongoing privatisation process. He said the measure aims to support fleet expansion and facilitate aircraft imports.
However, he noted that extending the exemption to all airlines may require IMF approval under Pakistan’s economic reform programme.
Despite concerns, the committee recommended expanding the exemption so other airlines could also benefit from tax relief. The move supports competition in the aviation industry and encourages investment in newer aircraft.
The meeting also covered several other tax-related reforms. Lawmakers approved proposals aimed at accelerating the digitisation of the FBR, including the expansion of its faceless Inland Revenue system.
The committee approves electronic auction amendments and changes to the Sales Tax Act’s Third Schedule. These changes will add new products to the list of items taxed on the basis of their printed retail price.
The discussion also covered SCO summit security, including bulletproof vehicle requirements for officials.
The committee includes the Aircraft Tax Exemption recommendation in the broader Finance Bill 2026-27 proposals.
