PIA bank accounts frozen again: Here's the reason

KARACHI - The national carrier suffered a fresh blow on Friday when 13 of its bank accounts were frozen.

The action was taken because of non-payment of Rs8 billion in Federal Excise Duty (FED), prompting the Federal Board of Revenue (FBR) to freeze the accounts.

According to FBR officials, Pakistan International Airlines' bank accounts associated with the International Air Transport Association (IATA) would also be frozen.

A decision has been made to register a first information report (FIR) against PIA officials for not submitting the FED,” said the FBR officials.

“The FED was not submitted despite the accounts being restored last month,” the official was quoted as saying by The News.

Meanwhile, a PIA spokesperson confirmed that freezing of the national carrier’s bank accounts would not affect its flight operations.

“There is contact at the government level. PIA’s accounts would be restored soon,” the spokesperson added.

The incident comes weeks after the carrier's bank accounts were frozen on July 27, over non-payment of taxes. At that time, the accounts were restored the following day after the settlement of issues between the FBR and PIA.

The national carrier is facing severe challenges with each passing day. Recently, it demanded a bailout package worth Rs 23 billion from the federal government but the request was denied.

Former Aviation Minister Khawaja Saad Rafique also stressed the importance of privatizing the carrier or else it would have to shut operations.

In the final days of the PDM regime, it was also decided to privatize loss-making Pakistan International Airlines during a meeting of the Cabinet Committee on Privatization chaired by then Finance Minister Ishaq Dar.

The committee “after deliberation decided to include Pakistan International Airlines Co. Ltd. in the list of active privatization projects of the ongoing privatization program, following an amendment in the law by the Parliament,” a finance ministry statement said.

The participants of the meeting also supported the hiring of a financial adviser to process the transaction of Roosevelt Hotel, New York, an asset of PIA Investment Limited.

The decision to privatize PIA comes amid measures to reduce the losses of the national exchequer through different state-owned enterprises; the national carrier is also set to resume flights to the United Kingdom and other European destinations by October.