Save Pakistan’s Travel & Tourism | TAAP Calls for Reversal of FED Increase On Int’l Travellers

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KARACHI: Travel Agents Association of Pakistan (TAAP) Strongly oppose the imposition of 150% increase in FED on Economy class and 40% on Business / Club/ First Class air tickets in recent Federal budget 2024-25 from 1st July 2024

TAAP bring to the attention of competent authorities of Pakistan through Media towards the matter leading to the brink of destruction of travel / tourism industry of Pakistan without considering serious consequences on Pakistan economy.

The implications of this hike are far-reaching:

1. Threatens to substantially raise the cost burden on international travelers.

2. This increase not only affects individual business travelers but also poses a significant challenge to IATA travel agents of Pakistan who are collector of such taxes and remit airlines thru IATA/BSP system of payment, whether agents receive payments or not from clients. This they do without being compensated by Government or Airlines.

3. This will adversely impact business travelers and results in reduction in Government revenue.

4. This increase will also significantly impact the common people who travel for employment

5. Many businesses rely on frequent international travel for sustaining business operations, client meetings, and conferences. The sudden increase in FED which is already higher adds to the overall travel expenses, it will negatively impact travel budgets.

6. The increased FED could diminish the competitiveness of agents operating in Pakistan, making it harder for them to offer competitive pricing compared to agents in other jurisdictions with lower taxes.

7. IATA agents who furnish financial guarantees to secure airline money to IATA, their guarantee amount will increase consequently it will increase their financial cost.

8. A thriving business environment depends on efficient travel infrastructure and affordable travel options. Any increase in travel costs could deter foreign investment, hinder business expansion, and impede economic growth.

9. We foresee a negative impact of this hike in taxes as it will result in high cost of tickets and most of the travelers will prefer to book tickets from other countries due to this fact the employment created by Travel agents will be at stake.

10. TAAP respectfully urge GOVERNMNET OF PAKISTAN to reconsider the recent decision of increase in FED on international travelers. While we understand the need for revenue generation, it is crucial to strike a balance that supports economic activity and facilitates international business travellers.

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