PAKISTAN'S BUDGET( 2014-15 ) FAILS TO ATTRACT PAKISTANIS ABROAD

PAKISTAN'S BUDGET( 2014-15 ) FAILS TO ATTRACT PAKISTANIS ABROAD

  

Quite unfortunate for Pakistanis’ abroad is that they’ll have to pay a very heavy price for returning to their near and dear country ‘Pakistan’, in the days to come. Whether its summer, winter or whatever season it is, the burden is surely to be imposed on all Overseas Pakistanis and interestingly, the airline fares they’ll have to pay will have no match in the history.

This is all because Pakistan’s new budget increases excise duty on international travel by 30% to 46%. The newly announced 2014-15 budget has so-called brought good news for Pakistan’s government servants but not at all for its overseas citizens as foreign travel to and from Pakistan will become dearer due to new excise duties.

While announcing the new budget, Federal Finance Minister of Pakistan asserted that the Excise Duty on international travel has been increased between 30 and 46 per cent by the government in the new budget, putting a huge burden on the pockets of the overseas Pakistanis.

The government of Pakistan has also proposed in the budget that airlines may collect advance tax of 3% on the sale of first class and club/executive class air tickets if the passenger is a compliant taxpayer, and 6% tax if the passenger is a non-compliant person. Under the new budget, Federal Excise Duty on Economy Class traveller has been increased from Rs3, 840 (39 US Dollars) to Rs5, 000 (USD 50.73), an increase of Rs1, 160 (USD 11.79) – or 30 per cent – per ticket. On the other hand, Business Class and First Class travellers will now have to pay Rs10, 000 (USD 101.47) duty on their air tickets compared to Rs6, 840 (USD 69.40) earlier – an increase of Rs3, 160 (32 USD), or 46 per cent.

The news disappointed a large number of Pakistanis residing in the Middle East, asking the government to withdraw the duty hike. To be very honest, this hike is totally unjustified and no government has ever taken overseas Pakistanis’ interest on a serious scale. This government is not an exception either. The government knows it very well that the important role played by overseas Pakistanis for their contribution in foreign exchange reserves. It’s the remittances sent by Pakistanis in the Middle East and other countries around the globe that help government to meet its debt obligations; but Pakistan’s government has never paid heed to Overseas Pakistanis’ needs and always burden them with new taxes or duties. A resident from a Gulf Country argued that the worst part is increase in excise duty for the Economy Class of Airlines as most of the Pakistani travellers from Gulf countries belong to middle class and the government should withdraw the duty immediately.

The Pakistani residents in the UAE also expressed disappointment over the finance document which fails to address their genuine problems despite sending remittances worth billions of dollars from the Emirate. They said present regime also ignored the contributions of overseas Pakistanis and gave no incentives in budget to encourage them for more remittances and investments in the country. Several businessmen from Abu Dhabi and Dubai said that the government did not do enough to tax the ultra rich people in a country where tax collection is less than eight per cent of the gross domestic production, or GDP. 

Very pitiable is really that if you board a flight to Pakistan next time, be prepared to shell out more, as the Pakistan government has proposed to raise the airfares by 46 per cent.

In a written statement, the Finance Minister of Pakistan, said on Wednesday that the government has proposed a hike of 46 per cent in tax on airfare for club, business and first class travellers in its budget.

For economy class, the government plans to increase federal excise duty on international air travel by 30 per cent, it said.

That means the ticket prices for business, first class passengers and economy are likely to go up. Under the new budget, excise duty on economy class travel may be increased by Rs 5,000 (OMR 19.5) per ticket and for business class and first class travel, it would be up to Rs10,000 (OMR 39.07) per ticket. 

"This is very steep," lamented Mohammad Zafar, who works at a private firm in Muscat and hails from Karachi.

A proposal:

Irfan Rashid, Country Manager of Pakistan International Airlines of Oman, said that the new rates have not come into force. "It is still a proposal which has to be passed by the cabinet and we haven't got any circular from our head office in Pakistan," he said.

Unjustified:

Terming the proposed airfare hike unjustified, another Pakistani national, Umar Abdullah said, "The hike is unjustified as the Pakistani expats play an important role and contribute towards the country's foreign exchange reserves." 

He also said that the remittances sent by the Pakistanis from abroad help government to meet its debt obligations. "But they never pay heed to our needs and always burden us with new taxes or duties," he added. 

Another Pakistani expat, Sohail Khan, said the budget is nothing but expression of it being business as usual.

"The government should have focused more on health, education, and security instead of giving more attention to road building. 

It has disappointed millions of overseas Pakistanis by promising them nothing in the budget. Besides that, the airfares for international passengers have also gone up," he said.

However, another Pakistani expat from Sur, Abdul Kalam said that these proposed changes will lead to increase in taxation. 

"This would then result in more refunds to the legitimate taxpayers and cost of non-filers; unless they are brought into tax net," he added.

The Overseas Pakistanis now demand from the government of Pakistan, for them to be given the right to vote and all whatever they deserve, instead of the imposition of heavy taxes and duties.