The Pakistani government has reduced the federal excise duty on airfares for blue-collar workers flying to the United Arab Emirates (UAE) and other Gulf Cooperation Council (GCC) countries.

According to a notification issued by the Federal Board of Revenue of Pakistan, a fixed amount of Rs5,000 (Dh66) per ticket will be collected from passengers holding a labor visa that has been verified by the Protector of Emigrants (Bureau of Emigration and Overseas Employment) and are embarking on an international journey from Pakistan to a GCC country. This is significantly lower than the previous tax of Rs12,500 (Dh165).

The new tax came into effect on August 10, 2024. Passengers eligible for the reduced fare are those who have a labor visa sticker in their passport, with the visa verified by the Protector of Emigrants, and are traveling from Pakistan to a GCC country.

The Dubai-based airline flydubai, which complies with the regulations set by local authorities, stated that this reduced fee is strictly applicable to passengers with verified labor visas traveling to GCC countries.

The UAE-Pakistan air corridor has been one of the busiest due to the large number of South Asian nationals living in the UAE. Airfares between the two countries are usually on the higher side due to limited seat availability.

The decision to levy a fixed federal excise duty comes as the Pakistani government increased the duty on business class air tickets to the 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 Pakistan due to a lack of jobs, high inflation, and political instability, leading them to seek employment in other countries. The GCC countries, including the UAE, Saudi Arabia, Oman, Bahrain, Qatar, and Kuwait, are the top destinations for Pakistani migrant workers, with Saudi Arabia and the UAE being the most popular.

In 2023-24, the GCC countries were the top destinations for a total of 862,625 Pakistanis seeking employment abroad. Around 1.7 million South Asian nationals, including 230,000 Pakistanis, live and work in the UAE.