IATA asks Pakistan to revoke recent tax hike on air tickets

The federal government of Pakistan has significantly increased the Federal Excise Duty (FED) on international flights in the 2024-25 budget. According to the official notification, the FED on economy and economy plus tickets has risen by 150 percent. This substantial hike has prompted immediate backlash from various stakeholders.

In response, the International Air Transport Association (IATA) has sent a letter to Pakistan’s finance ministry, demanding the immediate rollback of the 150 percent tax increase on international air tickets. IATA argued that implementing such a tax hike without consulting stakeholders violates international civil aviation rules and regulations. They also highlighted that the increased tax adversely affects the business operations of airlines and travel agents.

On July 6, the Travel Agents Association of Pakistan (TAAP) declared the recent tax increase on air tickets illegal, stating that the steep rise has thrown the industry into a severe crisis. During a press conference at their office, former chairman and executive committee member Nadeem Sharif warned that the industry could face devastation due to these measures. Similarly, APJC Chairman Muhammad Hanif Ranch criticized the government's actions over the past five days, asserting that they have violated existing laws and labeled the tax increases as arbitrary and harmful to the travel and tourism sector.

The travel industry, including Pakistan International Airlines (PIA) and other airlines, has already started notifying customers of the increased FED on flights, intensifying concerns raised by industry stakeholders.