The Government of Pakistan has introduced a new round of Federal Excise Duty (FED) on airline tickets. This will be imposed on customers who purchase club class, business class, and first-class tickets, and the rate of the duty will depend on the destination. The government plans to raise PKR 170 billion in tax revenue and unlock $1.1 billion from the International Monetary Fund by implementing this new tax. However, it will not affect economy class travelers, and it will only apply to customers traveling outside of Pakistan. The FED on airline tickets was originally part of the Finance (Supplementary) Bill 2023 approved by the cabinet on February 15. The bill caused controversy, leading to suggestions that specific amounts be set for each destination instead of imposing a tax. The effects of the new tax on the aviation industry are unclear, but it is expected to increase the cost of travel for passengers, and it remains to be seen how many passengers will downgrade to economy class to avoid the FED.