ISLAMABAD: The International Air Transport Association (IATA) has written a letter to the federal finance minister, expressing concern over the recent tax increase on international air travel tickets.
IATA has demanded that the government immediately withdraw the tax hike on air travel. “The recent budget in Pakistan suddenly increased the tax on international air travel tickets by up to 150 percent,” the letter states.
“This move will reduce travel and tourism to Pakistan. It is essential to consult all stakeholders a few months before implementing such an increase,” the letter continues.
IATA emphasized that the tax hike will negatively impact the business of travel agents and airlines and urged the government to revoke the decision.
According to the letter, IATA also highlighted that the sudden tax increase violates international civil aviation laws.
Meanwhile, Pakistan has decided to restrict foreign travel for non-filers, with exceptions for those traveling for Hajj, Umrah, or educational purposes, as the country unveiled its Rs18.9 trillion budget on Wednesday.
The Finance Bill proposes a penalty of Rs10 million for travel agencies that fail to enforce these new regulations.
Finance Minister Muhammad Aurangzeb presented the budget in a National Assembly session, which was marked by anti-Nawaz Sharif slogans from the opposition.
In his speech, Aurangzeb emphasized the need to digitize the Federal Board of Revenue (FBR) and implement reforms to enhance tax collection.
The government has set an ambitious tax revenue target of Rs 12,970 billion for the FBR, representing a 38% increase from the current fiscal year.
The Finance Bill also states that repeat offences of non-compliance will result in a fine of Rs20 million.
Additionally, the government had previously prepared to take action against three million non-filers, including disconnecting their electricity and gas connections.
Media reports indicate that the government will enforce these regulations to disconnect the utilities of non-filers, tightening measures against tax evaders by leveraging tax laws.
