Pakistan Proposes Major Reduction in Duty on Business Class Air Tickets in Budget 2026-27

Islamabad: A significant relief is expected for Pakistani travelers planning international trips, as the federal budget 2026-27 has proposed a substantial reduction in Federal Excise Duty (FED) on business class air tickets.

According to budget documents, the FED on business class travel to the United States has been proposed to be reduced from Rs350,000 to Rs50,000 per ticket, potentially lowering overall travel costs significantly.

Similarly, for flights to Middle Eastern and African destinations, the duty is proposed to be reduced from Rs105,000 to Rs25,000. For European countries, the FED has been suggested to be cut from Rs210,000 to Rs40,000.

For travel to Far East destinations and Australia, a fixed duty of Rs40,000 has been proposed under the new budget framework.

Officials said the move aims to promote the aviation sector, encourage international travel, and reduce the financial burden on passengers. The Federal Board of Revenue (FBR) stated that the proposed reductions are expected to increase demand for air travel and provide support to the aviation industry.

If approved, the revised tax structure will mark a major shift in travel-related taxation in Pakistan.