The Aircraft Owners and Operators Association (AOOA) has alleged that foreign airlines operating in Pakistan move between $2 billion and $2.4 billion out of the country each year through ticket sales processed via offshore payment gateways. The association has asked the government to order a five-year forensic tax audit of all airlines operating in the country.
In a letter dated Wednesday to Finance Minister Muhammad Aurangzeb, AOOA founder Imran Aslam Khan urged immediate government action. He also called for restrictions on ticket payments made through foreign payment gateways. The letter became public on Thursday.
The association estimated that annual airline ticket sales in Pakistan total between $3.2 billion and $3.6 billion, and said only a fraction is recorded through domestic financial channels.
It put the share of the Pakistan International Airlines (PIA) at about $750 million and the combined revenue of other domestic carriers at $65 million. Officially recorded foreign remittances ranged between $80 million and $411 million.
According to the letter, these documented streams add up to a maximum of $1.226 billion, leaving an unaccounted gap of $2 billion to $2.4 billion every year. The association added that the revenue estimate could be conservative, citing market analyses that place Pakistan’s broader flight market at more than $6 billion annually.
The letter stated that 40 to 42 scheduled airlines operate through the international and domestic airports, including four active domestic carriers and about 36 or 37 foreign airlines. Foreign carriers account for nearly two-thirds of the international ticket revenue, with leading operators earning hundreds of millions of dollars each from routes serving the country.
The association questioned whether financial authorities can track the missing funds and whether airlines have met their statutory tax obligations. It also asked why domestic airlines prefer foreign payment gateways over local financial infrastructure.
The AOOA proposed a four-point framework to curb financial leakages and improve tax compliance in the aviation sector:
- Process all ticket sales for journeys originating in or destined for Pakistan exclusively through payment gateways regulated by the State Bank of Pakistan (SBP).
- Embed a Federal Board of Revenue (FBR) tax collection mechanism directly within the payment gateway, with “zero exemptions permitted.”
- Require airlines to submit verified passenger and sales manifests for every flight to the FBR through an automated electronic reporting system.
- Appoint three leading international auditing firms to conduct separate forensic tax audits covering the previous five years.
The letter said any identified shortfalls must be recovered immediately to deter future evasion. It added that Pakistan cannot allow billions of dollars in domestic economic activity to move into offshore accounts while the country is working to stabilise its foreign reserves.
