Pakistan has implemented a set federal excise duty of Rs5,000 (Dh66) on airfares for blue-collar workers traveling to the UAE and other Gulf Cooperation Council (GCC) countries, thereby increasing the cost of flights for these workers. This decision was announced by the Federal Board of Revenue of Pakistan in a recent notification. The notification specifies that a fixed amount of Rs5,000 per ticket will be collected from passengers holding a labor visa, which is duly verified by the Protector of Emigrants (Bureau of Emigration and Overseas Employment), embarking on international flights from Pakistan to GCC countries.
The UAE-Pakistan air corridor is one of the busiest due to the significant number of South Asian nationals residing in the Emirates. Airfares between the UAE and Pakistan are typically high due to limited seat availability. A three-hour flight from Pakistani cities to the UAE often costs more than similar flights from neighboring countries. This new tax will further burden the already strained earnings of blue-collar workers, who form the largest group of migrants from South Asia.
"This is an additional burden on workers like me. Although it may seem like a small amount in UAE dirhams, Rs5,000 is a substantial sum for poor workers from remote areas of Pakistan seeking a better financial future. These blue-collar workers are also the main source of remittances to Pakistan. The government should reconsider such decisions," said Ali Ahmed, who came to the UAE as a laborer but now works as an assistant at a private company. Currently, five Pakistani and four UAE carriers operate between the two countries.
The decision to impose a fixed federal excise duty follows the Pakistan government's increase in duty on Business Class air tickets by Rs30,000 to Rs105,000 for flights to the UAE, GCC, and other Middle Eastern countries from July 1, 2024. Over the past few years, there has been a significant migration of people from South Asia due to job shortages, high inflation, and political instability, forcing them to seek employment abroad. The GCC countries, which include the UAE, Saudi Arabia, Oman, Bahrain, Qatar, and Kuwait, host the largest number of Pakistani diaspora.
In the 2023-2024 period, the GCC countries were the top destinations for South Asian migrants, with a total of 862,625 people going abroad globally for livelihood. Saudi Arabia was the leading destination, with 426,951 Pakistanis heading to the kingdom for jobs, according to data from the Pakistan Economic Survey 2023-24. Approximately 1.7 million South Asian nationals live and work in the UAE. In 2023-24, 230,000 Pakistanis migrated to the UAE for better opportunities. Oman employed 60,046 Pakistani workers, 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 as of April 2024. About 96% of Pakistani registered workers for overseas employment are in GCC countries, particularly Saudi Arabia and the UAE, contributing significantly to Pakistan's economy through remittances, which are the primary source of foreign exchange after exports.
