Pakistan has imposed a fixed federal excise duty of Rs5,000 (Dh66) on airfares for blue-collar workers flying to the UAE and other Gulf Cooperation Council (GCC) countries, which will further increase the cost of flights for the workers.
This was announced by the Federal Board of Revenue of Pakistan in a notification issued last week.
The notification stated that a fixed amount of Rs5,000 per ticket will be collected “from the passengers holding labour visa printed on their passports duly verified by the Protector of Emigrants (Bureau of Emigration and Overseas Employment) embarking on an international journey from Pakistan to Gulf Co-operation Council Countries (GCC)”.
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The UAE-Pakistan air corridor has been one of the busiest due to a large number of South Asian nationals living in the Emirates. Airfares in UAE-Pakistan are usually on the higher side already due to a shortage of seat availability. A three-hour flight from Pakistani cities to the UAE often costs more than the same-hour flights from neighbouring countries.
This new taxation will further strain the blue-collar workers’ meagre earnings as they make up the largest chunk of people migrated from the South Asian country.
“This is an additional burden on workers like me. It may sound like a small amount in UAE dirhams, but Rs5,000 is a fairly decent amount for poor workers coming from remote areas of Pakistan in search of a better financial future. These blue-collar workers are also the largest source of remittances to Pakistan. The government must think twice when making such decisions,” said Ali Ahmed, who came to UAE as a labourer but is now working as an assistant at a private company.
Currently, five Pakistani and four UAE carriers operate between the two countries.
The decision to levy fixed federal excise duty comes as the Pakistan government increased duty on Business Class air tickets by Rs30,000 to Rs105,000 to UAE, GCC and other Middle Eastern countries from July 1, 2024.
Over the past few years, there has been a mass exodus of people from the South Asian country due to a lack of jobs, high inflation and political instability forcing them to look for jobs outside of the country.
The GCC countries include the UAE, Saudi Arabia, Oman, Bahrain, Qatar and Kuwait. This region houses the highest number of Pakistani diaspora.
In 2023 to 2024, the GCC countries were the top destinations as a total of 862,625 people of the South Asian community went abroad globally for livelihood.
Saudi Arabia was the top destination as 426,951 Pakistanis went to the kingdom for jobs, the data showed, which was published in Pakistan Economic Survey 2023-24.
Around 1.7 million South Asian nationals live and work in the UAE. In 2023-24, 230,000 Pakistanis migrated to the UAE for greener pastures.
Oman employed 60,046 Pakistani workers, accounting for 7 per cent, while Qatar offered jobs to 55,112 individuals. Bahrain and Malaysia hosted 13,345 and 20,905 workers, respectively.
More than 13.53 million Pakistanis have gone abroad through official procedures to work in over 50 countries until April 2024. About 96 per cent of Pakistani registered workers for overseas employment in Gulf Cooperation Council countries, especially Saudi Arabia and the UAE. They contribute to the development of Pakistan’s economy by sending remittances, the primary source of foreign exchange after exports.