Sales tax exemption extended to aircraft and ship imports for Pakistani airlines
The Federal Board of Revenue has reinstated sales‑tax relief on the import or lease of aircraft and related parts for all airlines registered in Pakistan, and also restored tax exemption on ship imports and related capital assets.
Share
Desk Analysis
How This Affects the Exchange
Sector Effect
Positive · Buy bias
Airlines benefit from tax exemption on aircraft imports, creating a Buy bias for related tickers.
Sectors & Direction
Desk read
Desk call: Buy bias · Positively affected
- TransportPositively affected
Companies
Companies Mentioned
- ISL· Positively affected · Buy bias
Mentions in This Briefing
Sectors: Transport — Positive · Buy bias. PSX tickers: ISL. Airlines benefit from tax exemption on aircraft imports, creating a Buy bias for related tickers.
Full Story
Open on Business Recorder## Policy change by the Federal Board of Revenue
The Federal Board of Revenue (FBR) issued new instructions on Monday, adding S. No. 181A to its field formation guidelines. The amendment extends a sales‑tax exemption to the import or lease of aircraft, aircraft parts, and related equipment for every airline company registered in Pakistan.
## Restoration of ship‑related exemptions
Previously, ships flying the Pakistani flag enjoyed a sales‑tax exemption until the benefit was withdrawn in 2021. The FBR has now reinstated the exemption for ship imports as well as for plant, machinery and other capital assets used in ship‑building.
## Impact on airline ticket duties
While the exemption eases the cost of acquiring aircraft, the government continues to levy a federal excise duty on club, business and first‑class air tickets. The rates have been rationalised to: - North America: Rs 50,000 per ticket - Middle East: Rs 25,000 per ticket - Europe: Rs 40,000 per ticket - Far East & Australia: Rs 40,000 per ticket These duties remain high and can, in some cases, exceed the ticket price.
## Why the change matters
The tax relief reduces the capital outlay for airlines expanding or renewing their fleets, potentially improving cash flows and profitability. It also signals a supportive regulatory stance toward the aviation and maritime sectors, which could encourage further investment.
## Outlook for investors
With lower acquisition costs, airlines may accelerate fleet modernization or expansion plans, benefiting related service providers and ancillary businesses on the PSX.