Pakistan's new budget has come under fire for imposing heavy taxes on air travel, significantly raising the cost of Umrah pilgrimages, international travel, and business trips.
The new price hike in airfare, applicable from July 1, has compounded problems for Umrah pilgrims, as well as those travelling to Gulf countries, Europe, the USA, Canada, and Australia.
The federal excise duty (FED) on economy and economy plus tickets has been increased from 40% to a staggering 150%, with the tax on economy tickets jumping from Rs5,000 to Rs12,500 for all destinations.
The tax burden doesn't stop there. Business class, club class, and first class tickets to America have also seen significant tax hikes from Rs250,000 to Rs350,000. Travel to the Middle East and Africa now faces a tax increase from Rs75,000 to Rs105,000, while European destinations and business club and first class tickets to Australia, New Zealand, Canada, Indonesia, Japan, and Korea see a jump from Rs150,000 to Rs210,000.
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This new tax structure has sparked outrage among those associated with the airline industry, as travel and tour operators are also worried about the increase in federal excise duty from 40 to 150%. Even overseas Pakistanis sending foreign exchange back home are concerned. Those earning foreign exchange abroad and remitting it back home have demanded the government withdraw the heavy tax.
Many Umrah pilgrims who had already booked trips are facing unexpected additional costs of Rs12,500. Travellers are pleading with the prime minister to abolish the tax on Umrah tickets.
Overseas workers are also concerned, arguing that the new taxes unfairly target those who contribute foreign currency to Pakistan's economy. A labourer said: "I have come to get a ticket to Muscat, I am shocked to hear about the taxes. We work abroad and send foreign exchange to Pakistan. Tax those people who do not pay taxes," he demanded.
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Travel and tour operators are worried about the impact on their businesses, with some reporting a potential Rs60,000-70,000 increase in costs for families travelling for Umrah. An operator said: "We appeal to the finance minister to withdraw these taxes. Due to the increase of these taxes, the burden of Rs60,000-70,000 has increased on a family going for Umrah. People are not able to pay these taxes, which is causing a lot of damage to our business."
Experts fear these new taxes could discourage travel and lead to a rise in connecting flights being booked from outside Pakistan, potentially hindering the flow of foreign exchange into the country.
