By: Malik Yasir Imtiaz Awan
From July 1, 2024, Government of Pakistan has imposed an extra tax burden on overseas Pakistani’s by imposing a hefty tax on air travel. The air fares would sky rocket because of these direct taxes on air tickets of every class which includes economy, economy plus, business and club class.
According to Yasir Imtiaz Awan (Founder Member Pakistan Tehreek e Insaf Middle East, Ex President PTI United Arab Emirates) these taxes were imposed as per the federal budget passed by National Assembly of Pakistan.
He also further said that people travelling to North America, Latin America, and Canada will pay an excise duty on air tickets which has been increased from Rs 250,000 to Rs 350,000 per business or club class.
Pakistani’s travelling to the Middle East (United Arab Emirates, Saudi Arabia, Qatar, Bahrain, Kuwait & Oman) and African countries will pay a sum of Rs 105,000 duty on their business or club class air tickets. An increase of Rs 30,000 against the amount in the outgoing fiscal year.
The excise duty on economy and economy plus class tickets has also been revised. Travelers in these classes will now pay Rs12,500 as excise duty, making international travel more expensive across the board. The new taxes will be collected at the time of booking, ensuring that the government captures this revenue upfront.
Similarly, the tax duty on the same category of tickets for travelling to New Zealand and Australia has also been increased to Rs 210,000, which is also same for China, Malaysia, and Indonesia on business or club class tickets.
Yasir Awan said budget 2024-25 has slapped taxes on every imaginable source of income, asset and consumable goods to force people cough up additional Rs 1.7 trillion in taxes to finance a 30% bloated federal budget. Out of the Rs 1.7 trillion additional revenue measures, about Rs 200 billion new taxes were introduced-the first mini-budget just before the start of the fiscal year 2024-25.
Yasir Awan said despite making the lives of common citizens living in Pakistan difficult through a new wave of taxes, the government exempted the income tax on sales of properties by serving and retired bureaucrats and serving and retired military personnel.
He also further added, just before the approval of the budget, the government took new measures making it difficult not only to live in the country but also made it expensive to leave the country by increasing taxes on travel. This move by the government is aimed at generating additional revenue through the aviation sector.
Yasir Awan also said that overseas Pakistanis have mixed sentiments on these taxes. For some they see it as a necessary measure to support the financial needs of the prevailing government, but for some they are concerned about the direct impact on travel affordability. Yasir Awan said for business travellers, in particularly, may feel the pinch, which would lead in reduction of their international business trips. As this would also impact the travel industry due to higher costs of tickets the travel booking would be low.
At the end Yasir Imtiaz Awan appealed the prevailing government that they should revisit the decision of imposing hefty taxes on air tickets which will directly affect the travellers and the travel industry.
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