Pakistan reduces ticket tax to PKR 5,000 for laborers flying to GCC countries

Pakistan has reduced the federal excise duty (FED) on flight tickets to PKR 5,000 for laborers flying to GCC countries from PKR 12,500 previously.

An order issued by the Federal Board of Revenue stated that the reduced duty would only be applicable to passengers whose passports have a labor visa duly verified by the Bureau of Emigration and Overseas Employment's Protector of Emigrants.

Previously, the FED on all economy class international tickets was PKR 5,000. However, it was raised to PKR 12,500 from July 1.

The increase had been widely criticized with the International Air Transport Association urging the government to take it back or at least delay implementation to January 2025.

According to Pakistan's Bureau of Emigration and Overseas Employment (BEOE), over 12 million Pakistanis are registered for employment in GCC countries. Saudi Arabia remains the top destination, with a total of 6.9 million Pakistani workers. It is followed by the United Arab Emirates with 4.36 million workers, Oman with 1.01 million, Qatar with 0.36 million, Bahrain with 0.23 million, and Kuwait with 0.19 million Pakistanis.

BEOE data shows over 90% of Pakistani workers abroad are laborers. In the first half of 2024 alone, 276,000 workers left for employment in GCC countries.

These workers' earnings that they send home account for a major chunk of Pakistan's remittances. Last year, Pakistani workers in GCC countries sent $16 billion home, which was over 50% of total remittances in fiscal year 2023-2024.