Implementing national aviation policy: Dar urges FBR to settle tax-related matters

Instructions come after meeting with aviation adviser to review progress.

KARACHI: Finance Minister Ishaq Dar has asked the Federal Board of Revenue (FBR) to sort out tax-related matters in the proposed national aviation policy in order to facilitate its early implementation, officials said.

His instructions came in a meeting he chaired late Monday to review progress on the policy.

The meeting was attended by Special Assistant to the Prime Minister on Aviation Shujaat Azeem and senior FBR and finance ministry officials.

Azeem told participants that in order to encourage the aviation sector, a forward-looking draft policy was formulated on the directives of the Prime Minister after a gap of 14 years.

“All stakeholders including airlines, flying clubs, charter operators, cargo operators, ground handling agencies and general aviation were consulted in the process,” he said.

He stressed on relaxation in the overall tax regime, deemed essential to encourage growth of the aviation sector.

In contrast to other countries in the region, aviation sector’s contribution in Pakistan was under 0.01%.

“For countries like India, Malaysia, Philippines and Thailand it ranged between 1.5% and 9.0%,” a statement quoted him as saying.

“Only 8% of the 180 million Pakistani population has access to air travel,” he said.

The situation could change with provision of proper incentives to prospective investors, he observed.

The policy also recommends tax-free investment in aviation and calls for outsourcing of all major airports including Lahore, Karachi and Islamabad, landsides and international buildings to prominent foreign companies.

The policy also seeks to exempt lease of aircraft from duties and taxes to encourage airlines to increase their fleet.

 

Published in The Express Tribune, January 14^th,  2015.

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