Home ›› 04 Jun 2023 ›› Front
The government in the FY24 budget has proposed travel tax hikes by up to 67 per cent to reduce unnecessary foreign travels but did not exempt migrants – who fly abroad to earn remittance and not to take pleasure trips – from the burden.
This has made many migrants deeply unhappy, and they urged the government to give them exemptions, saying taxes, if the government wants, can be raised for those travelling to developed countries, including those in Europe and America.
Local think tank Centre for Policy Dialogue also said migrants should not be burdened with the increased travel tax.
Association of Travel Agents of Bangladesh Secretary General Abdus Salam Aref told The Business Post the hiked tax will create pressure on remittance earners as their expenses of going abroad or coming home on vacation will increase.
Replying to a question, Aref said travel agents will not be affected by increased airfares or taxes. “At the end of the day, travellers will bear this. If the government generously considers reducing the tax, travellers will greatly appreciate that.”
Students going abroad for higher studies are also under the purview of the increased tax even though they, like migrants, do not take those trips for pleasure.
Airfare is already up due to the global economic crisis, said Kazi Ananna Zaman, who is going to the US next month to pursue a master’s degree.
Besides, many airlines are charging high fares for travelling from Bangladesh compared to other countries, she said. “Most students go abroad for higher studies with scholarships. They will feel the extra tax burden as their airfare will go up.”
While placing the FY24 budget at parliament on Thursday, Finance Minister AHM Mustafa Kamal proposed a multi-modal increase in travel tax rates to reduce unnecessary foreign travels, inculcate austerity habits, and create new revenue streams in the economy.
“This policy will give us more revenue on the one hand and save dollars on the other,” he said, adding the Russia-Ukraine war has created instability in the world and there are signs of recession in the global economy.
“In this case, we have to face a difficult situation in the next financial year. We have to deal with the situation by formulating financial rules and implementing those with great prudence and foresight,” Kamal said.
The government will impose the new rates by amending the Travel Tax Act 2003, he added.
Passengers of nine categories, however, will not need to pay the increased tax, including hajj pilgrims going to Saudi Arabia; cancer patients; visually impaired and disabled persons using stretchers; United Nations employees and their family members; workers of foreign missions in Bangladesh; employees of the World Bank, Japan International Cooperation Agency, and GIZ as well as their families; airline crew members; transit passengers; and Bangladeshi employees of foreign airlines.
Tasneem Arefa Siddiqui, a political science professor at the University of Dhaka and the founding chair of Refugee and Migratory Movements Research Unit, said migrants go abroad for work, not for travelling.
“They go to other countries to earn money. They are not rich. They go abroad out of necessity.”
Describing the tax hike as unfair, she said this will increase migration costs.
“Migrants mostly do not get any good incentives. The government should have considered their situation before raising the tax. They should be exempted from this.”
Shameem Ahmed Chowdhury Noman, secretary general at Bangladesh Association of International Recruiting Agencies, said several lakh people go abroad for employment every year.
“We always say those who go abroad for jobs will benefit as much as their costs can be reduced,” he said.
“Air tickets have become markedly pricier in several years. $250-300 tickets are now $800-1,000. It is migrants who are bearing the additional costs,” he explained.
Noman also said no additional costs should be imposed on the migration sector. “We urge the government to exempt migrants from paying the hiked tax.”
How much more will travellers pay?
A traveller will pay Tk 6,000 in taxes to go to North America, South America, Europe, Africa, Australia, New Zealand, China, Japan, Hong Kong, North Korea, Vietnam, Laos, Cambodia, and Taiwan. The current tax for these destinations is Tk 2,500.
In case of going to a South Asian Association for Regional Cooperation country, a passenger will pay Tk 2,000 while the current tax is Tk 800.
A tax of Tk 4,000 has been proposed for going to any other country while the current figure is Tk 1,800. This means expatriates working in the Middle Eastern countries will need to pay Tk 4,000 in travel tax.
Moreover, a tax of Tk 200 has also been proposed in the budget for domestic air travel. At present, there is no travel tax for this.
For travelling to any country via land borders or waterways, passengers have to pay a tax of Tk 1,000. Currently, passengers pay Tk 500 for travelling to countries via land borders and Tk 800 via waterways.
The finance minister has also proposed halving the tax rates for passengers of up to 12 years of age.
