Karachi, July 17, 2024 – The Federal Board of Revenue (FBR) has announced new Federal Excise Duty (FED) rates for international air travel, as amended through the Finance Act 2024. The revised rates have been in effect since July 1, 2024.
According to the FBR, the FED rates apply to services related to air travel for passengers embarking on international journeys from Pakistan. The changes are as follows:
Economy and Economy Plus Tickets:
• For air tickets issued on or after July 1, 2024, the FED rates for economy and economy plus classes have been raised to Rs 12,500 from the previous Rs 5,000.
Club, Business, and First-Class Tickets:
1. IATA Traffic Conference Area 1 (North, Central, South America and Environs):
o The FED rates have been increased to Rs 350,000 from Rs 250,000.
2. IATA Traffic Conference Area 2:
o Middle East and Africa:
The FED rates have been raised to Rs 105,000 from Rs 75,000.
o Europe:
The FED rates have been elevated to Rs 210,000 from Rs 150,000.
3. IATA Traffic Conference Area 3 (Far East, Australia, New Zealand, and Pacific Islands):
o The FED rates have been increased to Rs 210,000 from Rs 150,000.
These adjustments reflect the government’s aim to enhance revenue collection while addressing inflationary pressures. The FBR emphasizes that these changes are part of a broader strategy to streamline tax collection and ensure equitable contributions from all sectors of society.
Travel industry stakeholders have expressed mixed reactions to the new rates. Some industry experts believe that the increased FED rates may deter international travel, especially among budget-conscious passengers. On the other hand, proponents argue that the revised rates are necessary to bolster the country’s fiscal health and infrastructure development.
Airlines are expected to update their ticketing systems promptly to incorporate the new FED rates. Travelers planning international trips are advised to check with their airlines regarding the updated ticket prices, which will reflect the revised FED charges.
The Finance Act 2024 has introduced several significant changes aimed at broadening the tax base and increasing revenue. The new FED rates on international air travel are a crucial component of these reforms, reflecting the government’s commitment to fiscal discipline and economic stability.
As the new rates take effect, the FBR will monitor their impact on air travel patterns and overall tax collection. Further adjustments may be considered in response to evolving economic conditions and stakeholder feedback.
For more details on the revised FED rates and other changes introduced through the Finance Act 2024, travelers and industry participants can visit the FBR’s official website or contact their respective airlines.