The federal government is considering imposing a new withholding tax on frequent foreign travelers in the upcoming budget (2023-24).
Sources told ProPakistani that the tax has been proposed for all categories of travelers on international air travel. The proposal specifies huge differences in tax rates for filers and non-filers of income tax returns.
Under the Finance Supplementary Bill 202, the government fixed the new rates of federal excise duty (FED) on air tickets of business, first class, and club class on the basis of regions/areas in line with the three tiers of IATA.
According to the rates, the FED would be applicable on club, business, and first-class air tickets issued on or after the date of commencement of the Finance (Supplementary) Bill 2023.
Under the first slab, the rate of the FED would be Rs. 250,000 on the said tickets of IATA Traffic Conference Area-1 (North, Central, South America, and Environs).
As per the second slab, the rate of the FED would be Rs. 75,000 on the said tickets of IATA Traffic Conference Area-2 (Middle East and Africa). The FED would be Rs. 150,000 for IATA Traffic Conference Area-2 (Europe). Under the third slab, the rate of the FED would be Rs. 150,000 on the said tickets of IATA Traffic Conference Area-3 (Far East, Australia, New Zealand, and Pacific Islands).