15 percent tax on tickets purchased abroad

Abbas Ali · Post by **Abbas Ali** » Fri Jun 30, 2006 10:45 am

KARACHI (June 30 2006): The Central Board of Revenue (CBR) on Thursday ordered airlines to collect 15 percent federal excise tax from passengers leaving Pakistan after midnight June 30, 2006 on tickets purchased outside Pakistan.

The finance bill 2006 has imposed this new levy on tickets for international travel. Airlines had asked for clarification from the CBR with regard to tickets purchased before July 1 and partly used by passengers, foreigners as well as Pakistanis living abroad had purchased tickets outside Pakistan.

Airlines had not collected the government levy at the time of sale. Increase in airline charges normally does not apply on partly travelled/used tickets. Payment of $100 federal excise on New York-Karachi-New York tickets is a steep charge. Airline officials expect fistfight and mayhem at the international departure lounge after midnight tonight.

Source: Business Recorder

Abbas Ali · Post by **Abbas Ali** » Fri Jun 30, 2006 10:47 am

Attention PIA's International Passengers

Federal Excise Duty (F.E.D) @15% of face value on return ticket excluding taxes and fees has been imposed on the passengers embarking on international journey from Pakistan with effect from zero hours of 1st July, 2006.

Where only one way ticket is issued, the charge will be applicable accordingly. The (F.E.D) @15% shall also be applicable on:

* The return ticket issued from abroad to passengers traveling to Pakistan.

* The tickets issued prior to 1st July, 2006, for journey on or after zero hours of 1st July, 2006.

On the tickets issued prior to 1st July, 2006, all international passengers will be required to pay the above mentioned 15% Federal Excise Duty (F.E.D) at the time of Check-in.

Source: PIA

Amaad Lone · Post by **Amaad Lone** » Fri Jun 30, 2006 12:28 pm

I think overseas Pakistanis should be patriotic and pay this fee.

The government needs all the money it can collect to pay for the six billion dollars worth of F-16s and AWACS.

Besides the 160 million resident Pakistanis are already overtaxed, its about time their overseas brothers and sisters start bearing some burdon of the defence budget.

raihans · Post by **raihans** » Fri Jun 30, 2006 3:09 pm

My room mate is travelling KWI-LHE on 5 Jul 2006 by PK206 and his return is expected on 5 Nov 2006, will this 15% duty implementation will effect his return journey LHE-KWI while reconfirming the ticket from PIA office or during check-in?

raihans · Post by **raihans** » Fri Jun 30, 2006 3:23 pm

Amaad Lone wrote:I think overseas Pakistanis should be patriotic and pay this fee.

The government needs all the money it can collect to pay for the six billion dollars worth of F-16s and AWACS.

Besides the 160 million resident Pakistanis are already overtaxed, its about time their overseas brothers and sisters start bearing some burdeon of the defence budget.

Most of us (Overseas Pakistanis) are sending our savings through bank so is that not enough for the Government that CBR found another way to earn some more $$$ from us?

B777240ER · Post by **B777240ER** » Fri Jun 30, 2006 4:14 pm

The government needs all the money it can collect to pay for the six billion dollars worth of F-16s and AWACS

Thats where the government is getting it wrong.

Education and Health are the most important priorities in an economy not on its defence.

So for passengers who have already bought tickets, the price will increase because of this tax?

Amaad Lone · Post by **Amaad Lone** » Fri Jun 30, 2006 5:58 pm

Maybe all international travelers should boycott Pakistan, and instead go to India.

Gulistan · Post by **Gulistan** » Fri Jun 30, 2006 6:47 pm

Amaad Lone wrote:I think overseas Pakistanis should be patriotic and pay this fee.

The government needs all the money it can collect to pay for the six billion dollars worth of F-16s and AWACS.

Besides the 160 million resident Pakistanis are already overtaxed, its about time their overseas brothers and sisters start bearing some burdon of the defence budget.

Believe me OP wont be found lacking, if our contribution ended were it was needed rather than lininbg the pockets if crooked officials and politicians.

Amaad Lone · Post by **Amaad Lone** » Fri Jun 30, 2006 7:19 pm

Incase nobody noticed, I was being sarcastic.

Doesn't anybody get sarcasim on this forum.

I have been condemning the wastage of resources being done in the name of defence of Pakistan.

As for returning to the topic.

Has the government gone crazy, taxing the few foreign souls who do wonder into Pakistan due to circumstances beyond their control.

allmyfamilyinpia · Post by **allmyfamilyinpia** » Fri Jun 30, 2006 8:35 pm

so what is going to stop the avg traveller from
doing lhe-dxb and then dxb-US. on seperate tickets.
I know CO EWR-DEL or AA ORD-DEL was attractive to me already and now
with this it becomes more attractive. Just have seperate tickets issued.
15% of DEL-LHE-DEL gotta be a lot cheaper than IAH JFK or whatever from pak.

Moin · Post by **Moin** » Fri Jun 30, 2006 9:44 pm

Hey people. Here is yet another example of our 'friendly to the common man' budget for you. Not only will this 15% tax be imposed on all those travelling outside our glorious Islamic Republic but those who purchase their tickets abroad in foreign currency and visit Pakistan too. We have succeeded yet again in breaking the world record for being the nation with the most absurd, idiotic, baseless and malafide rules and regualtions.

Yes I'm #$%&ing pissed about this as well. I have already paid Rs.74,500 for my C class ticket on QR and am flying out on the 1st at 20.30pm to LHR and now will be carrying an extra Rs.10K with me to contribute to this blatant example of daylight robbery

A return ticket to DXB from KHI, which used to cost Rs.11K will now cost Rs.17K.

The CBR individual who very slyly conceived this 'how dare you be wealthy enough to afford foreign travel' tax is right now as we sit here, away on holiday and unable to be reached, totally oblivious and dis-interested in the effect this is going to have. Such individuals belong in front of a firing squad. I'm expecting to witness a few scenes at the airport later today.

And might I ask, is this how you expect to attract foreign investors? Is this how you want to promote your so-called 'Visit Pakistan 2007'? What a sick joke

And what of those who have been saving their money for years just to be able to afford to travel to perform Hajj and Umrah? If you ask me, those tickets should be tax exempt, period! But of course, how can you expect our Islamic Republic into contributing to the fulfilling of its citizens religious obligations? No way. When it comes down to this, the Islamic Republic title goes out the window.

A petition has been filed before the relevant tribunal disputing this unlawful imposition but the CBR has very clearly said 'not to even discuss this tax, it has been imposed and nothing can be done to reverse or revoke it'. Yeah right. If it suits them, they can make, break and reverse laws in the span of a few minutes. What a load of crap. The only issue at hand now is how and where to collect this tax as the travel agents association has downright refused to collect this tax from their pax, which I fully support.

I sincerely hope that alot of noise is made about this, especially from the airlines. Unfortunately alot of our people just quietly accept all this crap being thrown at them and hence the powers that be have a free hand at doing what they jolly well please. What happened to people power? I'm happy to see its being demonstrated to a great extent on the streets of Karachi as far as KESC is concerned, but it needs to be exercised a hell of alot more or else we'll be squeezed dry.

They allowed the import of used cars for a few years and when they felt they made enough money, they slap a ban on the import and think up of some other way to extract money from the people, this being one example. Fear not, they will conjure up more ways to get your money to pay for their expensive toys such as F-16's. If our nation has many a novice and evader of taxes, the Govt has no one to blame but itself and to an extent it serves them right.

IMHO this tax will not be abolished. The CBR is thick skinned enough to ignore the consequences of their actions as they know that at first alot of noise will be made about it but later it will subside and everyone will just meekly and obediently pay up and shut up. Its happened many a time before at it will continue to happen again.

Abbas Ali · Post by **Abbas Ali** » Sat Jul 01, 2006 6:47 am

International flights: travel agents not to collect FED from passengers

BY IQBAL MIRZA

KARACHI (July 01 2006): The travel agents have decided not to collect the 15 percent Federal Excise Duty (FED) from the passengers embarking on international journey. The decision was taken at a meeting of Travel Agents Association of Pakistan (TAAP) held here on Thursday. All the airlines have been informed accordingly.

TAAP, in a letter to Pakistan International Airlines (PIA), sought clarification about the method being adopted for the collection of FED. It also asked if booths had been established at the airports for the collection of this tax.

Taap made it clear that its members could not be held responsible for collecting the FED, and suggested that the Board of Airline Representative in Pakistan (BARIP) should request the Central Board of Revenue (CBR) that the tickets issued till June 30, be exempted from the FED for onward travel in July.

The Large Taxpayers Unit (LTU), in a circular to all the airlines on June 22, requested to get themselves registered with the CBR immediately in connection with the imposition of the FED on travel by air of passengers embarking on international journey from Pakistan.

The LTU made it clear that the airlines were required to "charge and collect the FED at the rate of 15 percent face value of return ticket, excluding taxes and fees, with effect from zero hours of July 1, from all the passengers embarking on international journey from Pakistan. "Further, where only one-way ticket is issued, the charge will be applicable accordingly.

The FED at the rate of 15 percent would also be applicable on:

-- The return tickets issued from abroad to passengers travelling to Pakistan.

-- The tickets issued prior to July 1 for journey on or after zero hours of July 1.

The Turkish Airlines, in a letter to all the travel agents, has desired that with effect from July 1, all departing passengers are liable to 15 percent FED on the face value of ticket, which will be collected from passengers/aircraft operating airline/Turkish airlines ex-Pakistan at the airport. Airlines have been requested not to write/charge FED on the ticket and inform all the passengers accordingly.

Senior Vice-President, PIA Marketing and BARIP Chairman S. Kamran Hasan, in reply to TAAP letter on the subject, said that as an airline "we share your concern on the imposition of CVT at 15 percent on international tickets.

"PIA had taken up this issue at the highest level and in this regard the PIA Chairman/Chief Executive Officer (CEO) and he himself have approached the concerned authorities for withdrawal of additional tax. "Despite all our efforts, we do not foresee any solution forthcoming," he said in his letter to Taap on June 29.

"Because of the paucity of time and the deadline of July 1 approaching, there is no way out for PIA but to implement the Federal Excise Duty as stipulated in the 2006-07 Federal budget," he said.

Source: Business Recorder

Abbas Ali · Post by **Abbas Ali** » Sat Jul 01, 2006 6:58 am

15 percent FED on air travel now applicable from August 1

ISLAMABAD (July 01 2006): The federal government has temporarily withheld the decision to levy 15 percent federal excise duty (FED) on international travel by air, says a CBR announcement late on Friday night.

In the budget 2006-2007, 15 percent excise duty has been levied on Pakistani passengers embarking on international journey. This levy was going to be effective from July 1, 2006. However, the government has decided that the levy of FED on international air travel shall now be effective from August 1, 2006.

The excise duty shall be leviable on the international air travel of Pakistani passengers with effect from August 1, 2006, irrespective of the date of issuance of the ticket. The CBR has issued necessary instructions to the concerned authorities/excise duty collecting officials pertaining to the new development.

Source: Business Recorder

behramjee · Post by **behramjee** » Sat Jul 01, 2006 5:27 pm

hello...its been a while since ive posted anything...been v busy with Gulf Air operations last 2 weeks due to peak season issues.

anyways i think this new policy is a total rip off as a JFK-KHI-JFK tkt in peak season costs approx US $ 1500 so 15% of that is $ 225...so you're trying to tell me that a typical Pakistani family of 2 adults + 2 children flying are going to pay US $ 225 x 4 : US $ 900 just as tax

I dont think so

There will be heavy heavy lobbying by many aviation related ppl to force the govt to bring this 15% figure down.

If the Govt does want to do this then my suggestion is to simplify the procedure by having a standard fee of US $ 25 per passenger as that is more reasonable.