Indonesia to Cover Flight Ticket VAT for Christmas and New Year Holidays

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September 23, 2025 | 12:12 pm

TEMPO.CO, Jakarta - The Indonesian government will cover the value-added tax (VAT) on airline tickets during the Christmas and New Year holiday season as part of its second-half 2025 economic stimulus package.

The plan was announced by Coordinating Minister for Economic Affairs Airlangga Hartarto after a meeting with several ministries at his office on Monday, September 22, 2025.

“A special holiday package will be introduced, which includes government-covered VAT for airline tickets and a 50 percent discount on transportation services on specific days or times,” Airlangga said in a press release issued by the Coordinating Ministry for Economic Affairs.

Previously, the 50 percent transport fare discount and VAT subsidy for flight tickets were not part of the economic package announced by Airlangga at the State Palace on September 15.

Details regarding budget allocation and implementation have not yet been disclosed. However, the policy will be carried out through the Ministry of Tourism and the Ministry of Transportation.

The government had earlier offered similar VAT relief during the school holidays in June and July under Finance Ministry Regulation (PMK) No. 36 of 2025, signed by then-finance minister Sri Mulyani Indrawati.

Currently, consumers pay an 11 percent VAT on flight tickets. Under the PMK, service providers were required to bear 5 percent of the tax, while the government covered the remainder. Authorities expect the latest holiday discounts to reduce ticket prices and stimulate household spending during the holiday period.

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