FBR issues Rs2.21 billion tax recovery notice to PIA

ISLAMABAD – The Federal Board of Revenue (FBR) has issued a recovery notice worth Rs2.217 billion to Pakistan International Airlines (PIA) over the alleged non-payment of income tax deducted from employees’ salaries. Reports said the airline had been withholding income tax from staff salaries but did not transfer the collected amount to the government treasury within the required period. The notice was issued by the Regional Tax Office-II (RTO-II) and sent to PIA’s finance department, directing the airline to clear the outstanding liability. The tax amount relates to deductions made between July 2025 and January 2026 under Section 149 of the Income Tax Ordinance, 2001. Tax authorities stated that the delay in depositing the withheld amount was against the requirements of tax rules, which require timely submission of salary withholding taxes. Records show that monthly deductions were made during the period, with the total accumulated amount reaching Rs2.217 billion. FBR said employers are legally responsible for deducting tax at the time of salary payments and depositing it with the relevant tax authorities. Separately, the tax authority has also contacted PIA employees, informing them that they may face difficulties claiming the deducted tax in their Tax Year 2026 returns if the amount is not deposited by the airline. The FBR has directed PIA to fulfill its tax obligations and deposit the outstanding amount immediately.