Pakistan proposes cut in air ticket prices for Australia, Europe and Middle East

ISLAMABAD – The federal budget 2026–27 has proposed a significant reduction in the Federal Excise Duty (FED) on business class air travel from Pakistan to various international destinations. Under the proposal, the FED on business class tickets to the United States may be cut from Rs350,000 to Rs 50,000. For travel to the Middle East and Africa, the duty could be reduced from Rs 105,000 to Rs 25,000. Similarly, for Europe, the FED is suggested to drop from Rs 210,000 to Rs 40,000. The same reduced rate of Rs 40,000 is also proposed for flights to Far East countries and Australia. According to Federal Board of Revenue (FBR) officials, the move is aimed at supporting the aviation sector, increasing demand for air travel, and encouraging international travel from Pakistan. Authorities believe the proposed tax reforms would provide relief to airlines and the wider travel industry.