Budget 2024-25, Heavy taxes on air tickets likely to cause significant fare hikes

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By Sana Kahn

Islamabad (Pakistan News Online) The National Assembly has approved the federal budget for 2024-25, totaling 18,877 billion rupees. This includes the approval of a clause increasing taxes on international air travel tickets.

During the session, presided over by Speaker Ayaz Sadiq, the budget was approved clause by clause. The National Assembly agreed to increase the tax rates on international air travel tickets. Starting from July 1, an economy and economy plus ticket for international travel will be taxed at 12,500 rupees. For travel to North, Central, and South America, the tax rate for business, club, and first-class tickets has been set at 350,000 rupees.

According to the budget for 2024-25, the tax on business and club class tickets to the US and Canada will increase by 100,000 rupees from July 1. For travel to the Middle East and Africa, an additional tax of 30,000 rupees will be imposed on business, first, and club class tickets. For travel to Europe, the tax on business, first, and club class tickets will be 210,000 rupees. The same tax rate of 210,000 rupees will apply to business, first, and club class tickets for travel to the Far East, Australia, and New Zealand.

The assembly also approved an amendment related to petroleum levy by majority vote. The amendment presented by Federal Finance Minister Mohammad Aurangzeb received 170 votes in favor and 84 against.

The maximum limit for the petroleum development levy on light diesel and kerosene was set at 50 rupees per liter. An amendment was also approved setting the maximum limit for the petroleum development levy on petrol and diesel at 70 rupees per liter.

The federal government has announced in the 2025 budget that the petroleum levy will be increased from the current 60 rupees per liter to 80 rupees per liter, with the levy being imposed in increments of 20 rupees per liter.

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