Air fares go sky-high as the National Assembly approves a new provision in the finance bill, leading to tax increases on international air travel tickets. The legislative change, effective from July 1, introduces hefty additional excise duties on both economy and business class tickets, profoundly impacting travelers’ budgets.
Air Fares Go Sky-High with New Excise Duties
The introduction of these new taxes means that economy and economy-plus international air tickets will now include an additional excise duty of Rs12,500. For those planning to travel to North America, Latin America, and Canada, the excise duty on business or club class tickets has surged from Rs250,000 to Rs350,000. This represents a staggering Rs100,000 increase, forcing travelers to reconsider their plans due to the substantially higher costs.
Impact on Business Class Travel to Key Destinations
Travelers heading to the Middle East and African countries will also feel the pinch, with the excise duty on business or club class tickets rising by Rs30,000 to a total of Rs105,000. Meanwhile, those flying to New Zealand and Australia will face an increased duty of Rs210,000 on the same category of tickets. The same elevated tax rate of Rs210,000 applies to business or club class travel to China, Malaysia, and Indonesia.
These substantial tax hikes on international air travel are likely to deter many potential travelers, creating a shift in international travel and potentially impacting tourism and business sectors across various regions.
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