ISLAMABAD - The government has decided to impose withholding tax on international air tickets and increase the rate of this tax from six to ten percent on the professionals like doctors, lawyers, charted accountants etc in the upcoming budget.
Sources said that withholding tax on international air tickets in budget 2014-2015 would generate around six billion rupees. Moreover, government would also enhance federal excise duty (FED) on the international travel, they added.
However, the withholding tax on international travel would not apply on economy class passengers. For business and first class also, there would be two rates of withholding tax on air tickets: as 5 percent on the filers of income tax returns and 10 percent on non-tax filers. The tax would be refundable after passengers file their tax returns. Sources said that government wants to bring wealthy non-taxpayers into tax net who are enjoying foreign trips without paying any tax. This budgetary proposal of the FBR would not have any impact on the general masses, as common people mostly travel in economy class. Also, the government is going to enhance withholding tax from six to ten percent for the professionals like doctors, lawyers, charted accountants and others.