Indonesia to Cover VAT on Economy Airfares for 60 Days

3 hours ago 1

April 26, 2026 | 12:29 am

TEMPO.CO, Jakarta - The Indonesian government has issued Finance Minister Regulation No. 24/2026, which provides a Value Added Tax (VAT) exemption for economy-class domestic flights by allowing the government to bear the tax.

Under the policy, the government will cover VAT on the base fare and fuel surcharge, helping reduce ticket prices for passengers despite rising airline operating costs driven by higher aviation fuel prices.

“This facility applies to ticket purchases and flights conducted within 60 days, starting one day after the regulation takes effect, so the benefits can be felt quickly and directly,” said Haryo Limanseto, spokesperson for the Coordinating Ministry for Economic Affairs, in a statement on Saturday, April 25, 2026.

He said the fiscal measure is necessary to keep ticket prices in check, noting that aviation fuel accounts for around 40 percent of total airline operating costs.

To ensure proper implementation, airlines are required to report the use of the VAT facility in an orderly and transparent manner in accordance with tax regulations. VAT rules will continue to apply to non-economy class flights.

Earlier, the government also adjusted fuel surcharges through Transportation Minister Decree No. 83/2026, raising the cap to 38 percent for both jet and propeller aircraft, from the previous 10 percent for jets and 25 percent for propeller planes.

The combined policies aim to maintain ticket affordability, support interregional connectivity, and sustain the national aviation industry amid rising global energy prices.

Read: Indonesia Sees 633 New Factory Plans in Q1 2026, Ministry Says

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