Massive taxation in Pakistan’s new budget has triggered a wave of inflation, with new taxes on air travel making it extremely expensive. The airfare hike, effective from July 1, has worsened the situation for Umrah pilgrims and travelers to Gulf countries, Europe, the USA, Canada, and Australia.
The federal excise duty (FED) on economy and economy plus tickets has skyrocketed from 40% to 150%, raising the tax on economy tickets from Rs5,000 to Rs12,500 for all destinations.
The tax burden extends further. Business class, club class, and first-class tickets to America have seen 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 class and first-class tickets to Australia, New Zealand, Canada, Indonesia, Japan, and Korea have jumped from Rs150,000 to Rs210,000.
This new tax structure has sparked outrage within the airline industry, with travel and tour operators expressing concerns over the FED increase from 40% to 150%. Overseas Pakistanis sending foreign exchange back home are also worried. Those earning foreign exchange abroad and remitting it home are demanding the government withdraw the heavy tax.
Many Umrah pilgrims who had already booked trips are now facing unexpected additional costs of Rs12,500. Travelers are pleading with the prime minister to abolish the tax on Umrah tickets.
