Senate panel backs aircraft import tax exemption for all airlines, not just PIA

The Senate Standing Committee on Finance has opposed a proposal limiting sales tax exemptions on aircraft and parts imports to Pakistan International Airlines Corporation Limited (PIACL) and recommended extending the relief to all eligible airlines.

The committee, chaired by Senator Saleem Mandviwala, reviewed the Finance Bill 2026-27 on Sunday and completed a clause-by-clause examination of proposed amendments to the Sales Tax Act and Federal Excise Act.

Mandviwala said restricting the exemption to PIACL would discriminate against other airlines and could lead to litigation.

He directed the Finance Ministry, Tax Policy Unit and Federal Board of Revenue to include all eligible airlines in the exemption schedule of the Sales Tax Act.

The committee subsequently amended the proposal to extend the exemption framework beyond PIACL to the wider airline industry.

Finance Minister Muhammad Aurangzeb said the exemption for PIACL had been proposed as part of the airline’s privatisation process and was intended to cover imports of new aircraft.

He informed the committee that the government would need approval from the International Monetary Fund before adding other airlines to the sales tax exemption schedule.

The committee also approved proposals related to the digitisation of the Federal Board of Revenue and the introduction of its faceless Inland Revenue system.

It endorsed the expansion of the Third Schedule to the Sales Tax Act by adding more products that would be taxed on the basis of their printed retail prices.

Amendments allowing electronic auctions of seized goods were also approved.

Separately, the committee approved the import of bulletproof vehicles for the Shanghai Cooperation Organisation Summit.

However, it sought details of the number and types of vehicles required to address security threats facing government officials.