Taxes on business class tickets — Pakistanis pay more than South Asian neighbors

Pakistan hiked the federal excise duty (FED) on international flight tickets once again in its budget for fiscal year 2024-25. While passengers flying in any class were heavily impacted, those in business and first class bore the brunt of the increase.

Not only has international travel become up to five times more expensive for Pakistani business and first class travelers, they pay more taxes than their Bangladeshi and Sri Lankan counterparts.

To travel to the same destination, a Bangladeshi pays PKR 67,000, a Sri Lankan PKR 88,000, and a Pakistani PKR 3.5 lakh in duties.

The International Air Transport Association (IATA) termed the FED hike a violation of Pakistan's commitments to the International Civil Aviation Organization's policies and urged the government to take the decision back.

Expressing disappointment at the government's decision, the IATA, in a letter to the government, pointed out that under Pakistan's FED Act 2005, the duty is only applicable to services provided or rendered in Pakistan.

Therefore, the FED should not be applied to international flight tickets, it said.

However, the government has maintained the new FED rates.