October 18, 2025 | 03:09 pm
TEMPO.CO, Jakarta - Indonesian Finance Minister Purbaya Yudhi Sadewa has officially signed a regulation granting value-added tax (VAT) incentives for domestic commercial air transportation services, specifically for economy-class tickets. The incentive provides a 6 percent VAT discount on flight fares.
The policy is outlined in Ministerial Regulation No. 71 of 2025, issued on October 15, 2025.
“The value-added tax on scheduled domestic economy-class air transportation services during the Christmas and New Year holiday period (Nataru) will be borne by the government in the 2026 fiscal year,” the regulation states, as quoted on Saturday, October 18, 2025.
The regulation took effect immediately upon its enactment. Previously, passengers paid 11 percent VAT on flight tickets. Under the new rule, the government will cover 6 percent of that amount through a reimbursement mechanism.
The reimbursement covers base fares, fuel surcharges, and other fees subject to VAT, provided these are services offered by licensed air transport operators.
The VAT subsidy applies to ticket purchases made between October 22, 2025, and January 10, 2026, and for flights operated from December 22, 2025, to January 10, 2026.
Earlier, Coordinating Minister for Economic Affairs Airlangga Hartarto said the government aims for the airfare discount to benefit up to 36 million passengers.
“The VAT will be covered by the government, along with a fuel charge discount and lower aviation fuel prices. This is expected to reduce ticket prices by 12 to 14 percent,” Airlangga said following a cross-ministerial coordination meeting at Wisma Danantara on Wednesday, October 1, 2025.
The government has also prepared additional transport incentives for the holiday season. These include:
Train ticket discounts of 30 percent for 1.5 million passengers from December 22, 2025, to January 10, 2026.
Sea transport fare reductions of 20 percent through PT Pelni, covering 405,000 passengers from December 17, 2025, to January 10, 2026.
Port service discounts via PT ASDP Indonesia Ferry, valid from December 22, 2025, to January 10, 2026, targeting 227,000 passengers and 491,000 vehicles.
These measures are part of the government’s efforts to ease transportation costs and boost public mobility during the peak Christmas and New Year travel period.
Anastasya Lavenia Yudhi contributed to the writing of this article.
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