Pakistan’s new budget has faced criticism for imposing substantial taxes on air travel, significantly raising the cost of Umrah pilgrimages, international travel, and business trips.
Effective from July 1, the increase in airfare has compounded difficulties for Umrah pilgrims and those traveling to Gulf countries, Europe, the USA, Canada, and Australia. The federal excise duty (FED) on economy and economy plus tickets has soared from 40% to an astonishing 150%, with the tax on economy tickets rising from Rs5,000 to Rs12,500 for all destinations.
The tax burden extends beyond economy class. Business, club, and first-class tickets to America now face a tax increase from Rs250,000 to Rs350,000. Travel to the Middle East and Africa sees a hike from Rs75,000 to Rs105,000, while European destinations and premium tickets to Australia, New Zealand, Canada, Indonesia, Japan, and Korea have jumped from Rs150,000 to Rs210,000.
This new tax structure has ignited outrage in the airline industry, with travel and tour operators expressing concern over the FED increase from 40% to 150%. Even overseas Pakistanis who send foreign exchange back home are worried. Those earning abroad and remitting funds to Pakistan are demanding the government retract the heavy taxes.
Umrah pilgrims who had already booked their trips are now facing unexpected additional costs of Rs12,500. Travelers are pleading with the prime minister to abolish the tax on Umrah tickets.
Overseas workers are also voicing their concerns, arguing that the new taxes unfairly target those contributing foreign currency to Pakistan’s economy. A laborer remarked, “I came to buy a ticket to Muscat and was shocked by the taxes. We work abroad and send foreign exchange to Pakistan. Tax those who do not pay taxes,” he demanded.
Travel and tour operators worry about the impact on their businesses, with some reporting potential cost increases of Rs60,000-70,000 for families traveling for Umrah. One operator said, “We appeal to the finance minister to withdraw these taxes. Due to these tax increases, the burden on a family going for Umrah has risen by Rs60,000-70,000. People cannot afford these taxes, which is severely damaging our business.”
Experts fear these new taxes could discourage travel and lead to a rise in connecting flights being booked outside Pakistan, potentially hindering the flow of foreign exchange into the country.
