KARACHI (June 07 2006): The travel trade in the country has reacted very unfavourably to the proposed increase in the airline tickets for foreign travel due to the imposition of 15 percent excise duty on foreign travel from Pakistan, reports UPP.
Travel trade operators said that the government of Pakistan is offering the year 2007 as the 'Visit Pakistan Year' but the imposition of 15 percent excise duty on foreign travel will adversely affect the success of the "visit Pakistan year." Secondly Pakistanis going abroad will avoid buying tickets in the country and instead will get their tickets purchased abroad. In fact, it will promote a clandestine system of obtaining airline tickets in Dubai or any outside country and would avoid paying 15 percent excise duty on airline tickets.
Travel trade operators said that how could they promote the selling of tourism in Pakistan when people going abroad, including tour operators organising packages for "Visit Pakistan Year 2007", when they go abroad. The trade also complains that it has not been consulted on the subject of excise duty on foreign travel ticketing. They pointed out that already some 35 to 40 percent increase in airline tickets was taking place on various accounts including fuel adjustment surcharge and airport taxes.
Now, the imposition of 15 percent excise duty on foreign travel will result in reduction in travel and increasing tendency on the part of Pakistani travellers to buy their tickets from abroad. It will result in under the table outflow of foreign exchange from Pakistan. The travel trade operators have urged the withdrawal of what they describe as 'an unjust tax' on foreign travel in the backdrop of "Visit Pakistan Year" in 2007.
Source: Business Recorder
Duty on airline tickets to harm 'Visit Pakistan Year' offer
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Duty on airline tickets to harm 'Visit Pakistan Year' offer
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15 percent CED may cripple air travel trade
IQBAL MIRZA
KARACHI (June 09 2006): The re-imposition of 15 percent Central Excise Duty (CED) in the federal budget 2006-07 on all foreign travel, besides hitting hard the labour class, wage seekers and Umra and Hajj pilgrims, result in many travel agencies go bust.
The sectors that are destined to be burdened are dismayed over the move, to the extent, that the worst hit would be the labour class and job seekers on whom the government had been hopefully looking to help Pakistan pull out of the list of failed countries.
Shahid Khaqan Abbasi, Chief Executive Officer, Air Blue told Business Recorder that 90 percent of the people, who travel to Dubai, Kuwait, Saudi Arabia and adjoining states belong to labour class and they would be the worst sufferers and the next would be the pilgrims.
He failed to understand the logic of imposing CED at this point of time when the airlines are already under pressure due to escalating fuel prices. He said that this would be a big discouraging factor and feared a drop in traffic.
Abbasi said if at all it was necessary, it should have been a direct tax on the airlines and not the passengers. Tax on the profitability of the airline would have been a better choice, he said, adding that while in US there was no tax on foreign travel, in UK it was only eight pound sterling.
Those in the travel trade thought that in the presence of foreign travel tax, airport tax, fuel surcharge, capital value tax, central excise duty on domestic travel, war risk tax, etc, the re-imposition of CED, which was earlier withdrawn by this very government in the federal budget 2002-2003 was unjustified. Hundred of thousands of job seekers, who go abroad ie, Gulf & Middle Eastern countries, Europe, USA and also the Far East, in no way belong to the affluent class, they said.
Lately more than 450,000 persons (approximately 300,000 Umra and 150,000 Hajj pilgrims) have been proceedings to Saudi Arabia for Umra and Hajj alone. Under the head of the proposed CED, the government will be collecting Rs 18,000,000 approximately from this single category of passengers alone. Additional revenue from other categories of passengers proceeding to destinations all over the world is extra.
Instead of putting the burden of CED on the already over-burdened foreign travel, the government should have thought of other sources to generate desired revenue, they said.
According to calculations made by the travel agents, in cases like the ticket for Dubai, taxes alone account for more than 50-75 percent of the fare. Similarly, on account of the proposed CED, airfares would be increased by Rs 5,000 to Rs 12,000.
The Umra fare will shoot up from Rs 27,000 to Rs 35,000, Dubai Rs 18,700, New York from Rs 81,000 to Rs 92,000 and London from Rs 44,000 to Rs 49,000. It is an irony that instead of encouraging and providing relief to foreign exchange earners, ie, job seekers, businessmen and pilgrims, they are being burdened with all kinds of frivolous taxes, they said.
Unfortunately, instead of managing its affairs within its resources, national carrier PIA increases the fare on routes like Saudi Arabia where it enjoys monopoly with Saudi Arabian Airlines, on the pretext of rising fuel prices and collect fuel surcharges separately.
They keep on repeating this practice on their monopolised Jeddah route. Within a couple of months only the fare will have increased from Rs 25,000 to Rs 35,000 inclusive of the proposed 15 percent CED. Similarly, war risk tax is still being collected by some airlines though the circumstances have changed now.
The travel agents, who appear pulverised, are likely to resist government's move. They feel that it would breed corruption, their own depleting capital would be blocked for months in an unproductive manner on credit, particularly to the government departments and their officers.
They will suffer heavy losses in the event of their receivables being bad debts and last but not the least, they will again be subjected to unnecessary harassment by the Central Board of Revenue (CBR) machinery for obtaining dual licence from the Excise and Taxation department too.
Syed Mehmood Hussain, Secretary General, Travel Agents Association of Pakistan (TAAP) said that the imposition of 15 percent CED would totally cripple the travel trade.
He said that TAAP's demand of 10 percent service charges as compensation for tax collection of billions of rupees on behalf of federal and provincial governments is constantly being ignored. Similarly, they had demanded reduction of taxes on air tickets and lowering of high rate of presumptive tax rate, this also did not find favour with the government, he said.
Although travel and tourism sector was declared an industry in the year 1990, the decision continues to be held in abeyance. The travel agents are, however, collecting billions of rupees as taxes for the government without any compensation.
Source: Business Recorder
IQBAL MIRZA
KARACHI (June 09 2006): The re-imposition of 15 percent Central Excise Duty (CED) in the federal budget 2006-07 on all foreign travel, besides hitting hard the labour class, wage seekers and Umra and Hajj pilgrims, result in many travel agencies go bust.
The sectors that are destined to be burdened are dismayed over the move, to the extent, that the worst hit would be the labour class and job seekers on whom the government had been hopefully looking to help Pakistan pull out of the list of failed countries.
Shahid Khaqan Abbasi, Chief Executive Officer, Air Blue told Business Recorder that 90 percent of the people, who travel to Dubai, Kuwait, Saudi Arabia and adjoining states belong to labour class and they would be the worst sufferers and the next would be the pilgrims.
He failed to understand the logic of imposing CED at this point of time when the airlines are already under pressure due to escalating fuel prices. He said that this would be a big discouraging factor and feared a drop in traffic.
Abbasi said if at all it was necessary, it should have been a direct tax on the airlines and not the passengers. Tax on the profitability of the airline would have been a better choice, he said, adding that while in US there was no tax on foreign travel, in UK it was only eight pound sterling.
Those in the travel trade thought that in the presence of foreign travel tax, airport tax, fuel surcharge, capital value tax, central excise duty on domestic travel, war risk tax, etc, the re-imposition of CED, which was earlier withdrawn by this very government in the federal budget 2002-2003 was unjustified. Hundred of thousands of job seekers, who go abroad ie, Gulf & Middle Eastern countries, Europe, USA and also the Far East, in no way belong to the affluent class, they said.
Lately more than 450,000 persons (approximately 300,000 Umra and 150,000 Hajj pilgrims) have been proceedings to Saudi Arabia for Umra and Hajj alone. Under the head of the proposed CED, the government will be collecting Rs 18,000,000 approximately from this single category of passengers alone. Additional revenue from other categories of passengers proceeding to destinations all over the world is extra.
Instead of putting the burden of CED on the already over-burdened foreign travel, the government should have thought of other sources to generate desired revenue, they said.
According to calculations made by the travel agents, in cases like the ticket for Dubai, taxes alone account for more than 50-75 percent of the fare. Similarly, on account of the proposed CED, airfares would be increased by Rs 5,000 to Rs 12,000.
The Umra fare will shoot up from Rs 27,000 to Rs 35,000, Dubai Rs 18,700, New York from Rs 81,000 to Rs 92,000 and London from Rs 44,000 to Rs 49,000. It is an irony that instead of encouraging and providing relief to foreign exchange earners, ie, job seekers, businessmen and pilgrims, they are being burdened with all kinds of frivolous taxes, they said.
Unfortunately, instead of managing its affairs within its resources, national carrier PIA increases the fare on routes like Saudi Arabia where it enjoys monopoly with Saudi Arabian Airlines, on the pretext of rising fuel prices and collect fuel surcharges separately.
They keep on repeating this practice on their monopolised Jeddah route. Within a couple of months only the fare will have increased from Rs 25,000 to Rs 35,000 inclusive of the proposed 15 percent CED. Similarly, war risk tax is still being collected by some airlines though the circumstances have changed now.
The travel agents, who appear pulverised, are likely to resist government's move. They feel that it would breed corruption, their own depleting capital would be blocked for months in an unproductive manner on credit, particularly to the government departments and their officers.
They will suffer heavy losses in the event of their receivables being bad debts and last but not the least, they will again be subjected to unnecessary harassment by the Central Board of Revenue (CBR) machinery for obtaining dual licence from the Excise and Taxation department too.
Syed Mehmood Hussain, Secretary General, Travel Agents Association of Pakistan (TAAP) said that the imposition of 15 percent CED would totally cripple the travel trade.
He said that TAAP's demand of 10 percent service charges as compensation for tax collection of billions of rupees on behalf of federal and provincial governments is constantly being ignored. Similarly, they had demanded reduction of taxes on air tickets and lowering of high rate of presumptive tax rate, this also did not find favour with the government, he said.
Although travel and tourism sector was declared an industry in the year 1990, the decision continues to be held in abeyance. The travel agents are, however, collecting billions of rupees as taxes for the government without any compensation.
Source: Business Recorder
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Moin
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When you calculate the fare on your ticket, just about half of it is f$#%ing taxes! 
Will our President and PM, who seem to enjoy so much foreign travel be paying this so-called CED as well?
The TAAP should take the Govt to court over this matter.
I have a better name for this tax, I'd call it 'How dare you be able to afford foreign travel-tax'.
Will our President and PM, who seem to enjoy so much foreign travel be paying this so-called CED as well?
The TAAP should take the Govt to court over this matter.
I have a better name for this tax, I'd call it 'How dare you be able to afford foreign travel-tax'.
Moin Abbasi
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Abbas Ali
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Air travel to be more expensive
Published: Sunday, 11 June, 2006, 09:19 AM Doha Time
LAHORE: Multiple taxes imposed on foreign travel by the Pakistan government and international airlines have made travel expensive.
Foreign travellers are paying 35-40% cost of the ticket as taxes to the federal government and airlines.
From July 1, this year Pakistanis would find foreign more expensive as the government has increased the rate of central excise duty from 10 to 15% in the 2006-07 budget.
Now, Pakistani nationals, travelling to Europe or the United States, pay 10% of the cost of ticket as central excise duty, Rs5,000-7,000 as fuel tax, Rs1,500 as foreign tax, Rs700 as airport tax and 1.5% RG tax.
Except the fuel tax which is shared by the international airlines, all the other taxes go to the state kitty, Fasih Ahmed, a travel IATA agent said.
The fuel tax also varies depending on the distance and destination, he added.
These taxes are in addition to the 15% withholding tax, imposed on the income of the travel agents, he said, adding that multiple taxes have become a headache for travel sector and a huge financial burden on the travellers.
The recent increase in the central excise duty on foreign travel, from 10 to 15% would put further financial burden on the travellers, Ahmed said.
He said it could be a blow for Pakistani expatriates visiting their country and those who embark on Umra and Haj.-Internews
Source: Gulf Times
Published: Sunday, 11 June, 2006, 09:19 AM Doha Time
LAHORE: Multiple taxes imposed on foreign travel by the Pakistan government and international airlines have made travel expensive.
Foreign travellers are paying 35-40% cost of the ticket as taxes to the federal government and airlines.
From July 1, this year Pakistanis would find foreign more expensive as the government has increased the rate of central excise duty from 10 to 15% in the 2006-07 budget.
Now, Pakistani nationals, travelling to Europe or the United States, pay 10% of the cost of ticket as central excise duty, Rs5,000-7,000 as fuel tax, Rs1,500 as foreign tax, Rs700 as airport tax and 1.5% RG tax.
Except the fuel tax which is shared by the international airlines, all the other taxes go to the state kitty, Fasih Ahmed, a travel IATA agent said.
The fuel tax also varies depending on the distance and destination, he added.
These taxes are in addition to the 15% withholding tax, imposed on the income of the travel agents, he said, adding that multiple taxes have become a headache for travel sector and a huge financial burden on the travellers.
The recent increase in the central excise duty on foreign travel, from 10 to 15% would put further financial burden on the travellers, Ahmed said.
He said it could be a blow for Pakistani expatriates visiting their country and those who embark on Umra and Haj.-Internews
Source: Gulf Times
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