A complete guide to new taxes on airlines tickets and travel destinations

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The Bill ordered that a tax equivalent to 20% of the ticket’s fare or Rs 50,000, whichever was higher, be levied on passengers travelling in business class, first class, and club class.

The measure, however, stirred controversy which was brought to light at the meeting of the Senate Standing Committee on Finance and Revenue on February 16. At the meeting, Senator Saleem Mandviwalla informed the Finance Division that the Aviation Ministry had expressed concerns about the proposed 20% tax on Business and First Class tickets, citing the variability of ticket fares. In response, the Senator suggested that a specific amount be set for each destination instead of imposing the tax.

Furthermore, he suggested that this would serve as an alternative approach to the proposed tax, which the Ministry deemed impractical due to the fluctuating nature of fares.

What is a club class?

One of the standout features is the introduction of the ‘club class’ as part of the fare categories which will have the FED levied upon them. The most basic definition of club class is that it is a fare category between economy class, and first class.

Amer J. Randhawa, a Lahore based travel consultant, explained the

MQM-P, PPP in unison to withdraw from Karachi by-polls

KARACHI

Staff RepoRt category to Profit “It is simply business class. Different airlines have different terminologies. Club is a general term used,”.

Does this affect domestic travellers?

Randhawa explains to Profit that the FED is applicable only on customers travelling outside of Pakistan, and not internal flights.

What about outbound connecting flights?

In the odd situation that customers might want to pull off a jugaar and only have their flight from Pakistan to a connecting destination as economy, and the remaining journey as business or first class, that is not possible. “If the ticket is bought in Pakistan then the entirety of the tax levied on both tickets will be applicable,” Muhammad Nadeem Sharif, Former Chairman Travel Agents Association of Pakistan (TAAP) tells Profit.

Similarly, “You’re always charged on the higher category of fare,” Randhawa tells Profit.

What if you were to depart from Pakistan, and then purchase another ticket from your new departure port to another destination? “The laws of that country will be applied on you since your journey from Pakistan is over,” Sharif explains to Profit.

What are Traffic Conference Areas?

The process of fare construction is contingent upon the regions which the customer intends to travel to, from, and via. To streamline the procedures associated with fare construction rules, routings, and fares, IATA has geographically classified the world into Eastern and Western hemispheres, and further categorised them into Traffic Conference Areas (TC Areas) and sub-areas.

The TC Areas encompass three cardinal regions, namely Traffic Conference Area 1 (TC1) encompassing the Western Hemisphere with sub-areas like North American, Central American, South American, and Caribbean sub-areas, while Traffic Conference Area 2 (TC2) and Traffic Conference Area 3 (TC3) embracing the Eastern Hemisphere encompass sub-areas such as European, African, Middle East, South Asian Subcontinent, South East Asian, and South West Pacific.

However, it should be noted that the sub-area divisions may not always align with the geographical location of countries. For instance, IATA deems certain North African countries, including Algeria, Morocco, and Tunisia, to be part of Europe.

Will the measure yield dividends?

Sharif estimates the total number of passengers that buy first and business class tickets to be 10-15% of the total passenger volume. How much the

Government estimates it will earn through this measure, or how many passengers will slip down to the economy to avoid the FED will be made evident in the months to come.

It is entirely also possible that, on the assumption that first and business class passengers have the means which this measure does assume, first and business class passengers might just break up their international journeys. They may only seek to travel the outbound flight from Pakistan on economy, and then later pause their journey at their new destination to obtain a new ticket to avoid paying the higher FED altogether.

What are the impacts on the industry as a result of all of this?

“The sector was already encumbered with a lot of problems, and the Government has gone and added to our problems,” Sharif tells Profit. “This will increase the cost of travelling for the passenger, and naturally this will lead to problems for the sector when there will be fewer passengers choosing to fly,” Sharif continues.

“We will have to just take it. The industry hasn’t fully recovered from the dual rates Emirates and Turkish stopping their local selling of tickets, and now this has been implemented, ” Randhawa tells Profit. “The funny thing is that flights are still full, and you cannot find an empty seat,” Randhawa continues.

Traders raise serious concerns over halt of Pak-Afghan bilateral trade

PESHAWAR aziz BuneRi

Muttahida Qaumi Movement-Pakistan (MQMP) and Pakistan People’s Party (PPP) — the two major coalition partners in the PDM-led federal government — have decided not to take part in the upcoming by-elections to the National Assembly constituencies in the port city. The decision was taken keeping in view the current economic and political situation of the country. From the Muttahida Qaumi Movement-Pakistan (MQM-P), Mustafa Kamal, Dr Farooq Sattar, Dr Sagheer Ahmed, Rauf Siddiqui and others have withdrawn their nomination papers. From the Pakistan People’s Party (PPP), Shehla Raza, Shahida Rehmani, Khawaja Sohail and others have withdrawn nomination papers. As per the ECP schedule, candidates can withdraw their nomination papers till February 22. The nine constituencies whereby by-polls are scheduled include: NA241 Korangi Karachi-III; NA-242 Karachi East-I; NA-243 Karachi East-II; NA-244 Karachi East-III; NA-247 Karachi South-II; NA-250 Karachi West-III; NA-252 Karachi West-V; NA-254 Karachi Central-II; and NA256 Karachi Central-IV.

Sarhad Chamber of Commerce and Industry (SCCI) president Muhammad Ishaq expressed serious concerns over stuck up of a large number of export and transit trucks laden with essential food commodities and perishable items at Torkham owing to closure of the border on Afghanistan side.

He urged the Afghan government to review its decision and issue orders for the immediate opening of the border.

Talking to a delegation of traders and exporters here at the chamber on Wednesday, Ishaq said it was witnessing a long queue of 7,500 export and transit trucks loaded with sugar and other perishable items from Torkham to Hamza Baba Chowk.

He warned the truck queue will be stretched over to Peshawa r, if the border on the Afghanistan side was not opened immediately.

On the other hand, the SCCI chief said the State Bank of Pakistan (SBP) has allotted a quota for 45 day of sugar export, and 22 days so far have almost passed.

Whereas, he added, traders are bearing Rs45,000 per truck as demurrage charges and Rs6,000 as halting charges per vehicle on the daily basis.

He said the Pak-Afghan traders have been faced with a huge financial loss due to closure of the border.

Ishaq said when they have made contact with Pakistani authorities concerned and then the official told us that the border was closed on the Afghanistan side, which has caused piling up of a large number of export and transit trade trucks at the Torkham border.

Therefore, he urged the Afghan government to revisit its decision as the further closure of the border was not in the best interest of Pak-Afghan traders, bilateral trade between the highlighting the return on investment in green projects is crucial to attract foreign investors and said that “Green energy is the future of Pakistan’s macro-economic policies.

Dr Hassan Daud, Senior Advisor SDPI said that Pakistan was the first to receive cash flow from China under BRI’s energy projects aimed at wind and solar energy generation. He said despite being the first, we have not explored the true potential of the sector so far. He emphasized that every cent spent on renewable energy technology guarantees long term energy and economic security for the country.

Christoph Nedopil, said that since 2022, there’s a much stronger willingness among Chinese companies to invest abroad in hitech sectors and is an area with immense potential which Pakistan can avail. He said that till 2019, China followed the host country’s environmental regulations in BRI construction and banking projects but that has changed significantly.

ahmed Hayat Lak assumes charge as MD ogDcL

ISLAMABAD ahmad ahmadani

On Wednesday the Board of Directors (BoD) of the Oil and Gas Development Company Limited (OGDCL) appointed Ahmed Hayat Lak, General Manager (Legal Services) as new Managing Director (MD) and Chief Executive Officer (CEO) with immediate effect. According to an officer’s order, OGDCL board in its 255th meeting held on Wednesday resolved that Lak shall look after the office of MD and CEO with immediate effect until further orders and shall perform the duties and functions of the office accordingly. “We are confident that he will utilise his skill set and multi-dimensional corporate experience to serve in this position,” said Shahzad Safdar, Executive Director (HR and Admin), in an office order circulated within OGDCL. According to sources, Lak has officially assumed charge as the top man. Prior to this, Lak was working as Company Secretary/Spokesman of OGDCL. Additionally, he has also played an important role in the drafting of the Reko Diq agreement with the Canadian company Barrick Gold Corporation saving Pakistan from paying penalties worth billions of dollars, added sources.

Imran Ordered To Appear Before Banking Court On Feb 28

ISLAMABAD Staff RepoRt both countries as well as transit trade.

The SCCI chief emphasized that Islamabad and Kabul should sort out solutions to all issues by holding a joint sitting and to prevent any damage to Pak-Afghan bilateral and transit trade. He also stressed the ending of an environment of trust-deficit between Pakistan and Afghanistan.

According to the Pakistani authorities, Ishaq said the government of Pakistan has issued clear instructions to utilize all possible resources to facilitate Pak-Afghan trade and transit trade.

As per directions, the SCCI chief said the Pakistan officials concerned told him that pragmatic steps are being taken for carrying out smooth and speedy bilateral trade between Pakistan and Afghanistan and trade to onward regional countries.

He added the Pakistan officials further informed that there was not creating hurdles in the way of bilateral trade.

The Islamabad high court (IHC) has ordered the former prime minister and PTI chairman Imran Khan to appear before court on February 28 in prohibited funding case. As per details, the banking court heard the plea of Imran Khan to appear before court via video link in the prohibited funding case. The PTI counsel told the court that Imran Khan couldn’t come to his Islamabad residence after Wazirabad attack incident. The prosecution’s case is why his health is not getting better but the medical reports have been submitted to the court, the counsel said. They further said that the medical reports were presented before Lahore high court (LHC) and they were satisfied with the reports. Justice Tariq Mehmood Jahingiri asked when will the PTI chief appear before the court. At this, the PTI counsel said that he will appear before March 3. The two member bench of IHC issued the orders and rejected PTI chairman Imran Khan’s plea to appear before court via video link in the prohibited funding case.

court serves notice on Sindh govt in appeal against Naqeebullah verdict

KARACHI: The Sindh High Court (SHC)

Wednesday directed the prosecutor general of Sindh, Faiz Shah, to respond to a petition challenging the acquittal of former Malir senior superintendent of police (SSP) Rao Anwar Ahmed and his subordinates in the murder of Naqeebullah Mehsud. Alam Sher, Mehsud’s younger brother, filed the petition challenging the acquittal of the accused. The court accepted the plea and directed the prosecutor general to submit a response within four weeks. Staff RepoRt