KARACHI: The airline fares have jacked up for passengers travelling abroad following the imposition of a 10pc direct tax in the form of a ‘super tax’ by the incumbent coalition government.
Prime Minister Shehbaz Sharif imposed a super-tax of 10 percent on large-scale manufacturers and industries in the country in order to address the economic woes of the country.
The prime minister, while announcing the tough decisions in the wake of the ongoing economic situation, said that industries related to steel, cement, sugar, oil and gas, fertilizers, energy and terminal, and textile will face a 10 percent tax.
According to a notification, the government has increased international airfares for passengers travelling via first class and business class.
“The Federal Excise Duty (FDA) RG tax has been increased from Rs10,000 to 50,000 on all first and business tickets for travel with effect from July 1, 2022,” the notification stated.
The Federal Board of Revenue(FBR) has stated that Federal Excise Duty is chargeable on Club, Business and First class international air tickets under Section 3 of the Federal Excise Act, 2005, said a press release issued.
Furthermore, sub-rule(8) of the rule 41A stipulates that FED is chargeable at the time of issuance of air tickets.
Thus, the enhanced rate of FED on air tickets under the new finance bill 2022 will be chargeable only on international tickets(Club, Business & First class) issued on and after 1st July, 2022.
FBR has further clarified that as federal excise duty is chargeable at the time of issuance of air tickets, therefore, the enhanced rate of federal excise duty at Rs.50,000 (previously Rs.10,000) is not applicable on the Club, Business & First class international air tickets already issued before 1st July, 2022.
