Pakistan
Pakistan Lowers Federal Excise Duty on Airfares for Workers Flying to GCC Countries. In a move to ease the financial burden on blue-collar workers, the Pakistani government has reduced the federal excise duty on airfares for those traveling to the United Arab Emirates (UAE) and other Gulf Cooperation Council (GCC) countries. The Federal Board of Revenue (FBR) of Pakistan issued a notification confirming the reduction, which took effect on August 10, 2024.
New Excise Duty Structure
Under the new regulations, a fixed amount of Rs5,000 (Dh66) per ticket will be collected from passengers holding a labor visa. This visa must be verified by the Protector of Emigrants (Bureau of Emigration and Overseas Employment) to qualify for the reduced duty. This is a significant decrease from the previous excise duty of Rs12,500 (Dh165), offering much-needed relief to Pakistani workers heading to the GCC for employment.
Who Benefits?
The reduced excise duty applies specifically to passengers with a labor visa sticker in their passport, verified by the Protector of Emigrants. These passengers must be embarking on an international journey from Pakistan to any of the GCC countries, including the UAE, Saudi Arabia, Oman, Bahrain, Qatar, and Kuwait. The new tax structure is expected to benefit a large number of Pakistani workers who regularly travel to these countries for employment opportunities.
Impact on Airlines and Passengers
Dubai-based airline flydubai, known for its compliance with local regulations, has already announced that it will implement the new reduced fee for eligible passengers. This reduction is expected to make air travel more affordable for blue-collar workers, especially along the busy UAE-Pakistan air corridor, which has seen consistently high airfares due to limited seat availability.
Broader Context
This decision to lower the excise duty comes in the wake of the Pakistani government’s recent increase in federal excise duty on business class air tickets to the UAE, GCC, and other Middle Eastern countries, effective from July 1, 2024. While business travelers face higher costs, the government’s new policy aims to support the significant number of Pakistani workers seeking better opportunities abroad.
The GCC countries have long been top destinations for Pakistani migrant workers, with Saudi Arabia and the UAE being the most popular. In the fiscal year 2023-24 alone, 862,625 Pakistanis sought employment in the GCC region. The decision to reduce the excise duty reflects the government’s recognition of the economic challenges faced by these workers and the need to facilitate their journeys.
The reduction in federal excise duty on airfares for Pakistani workers traveling to GCC countries is a welcome relief for many families. As more Pakistanis continue to seek employment opportunities abroad, this policy shift ensures that they can travel with fewer financial burdens, supporting their efforts to improve their livelihoods.
