Government Covers VAT on Economy Class Air Tickets for 60 Days

The government has issued Minister of Finance Regulation Number 24 of 2026 (PMK 24/2026), which regulates the facility for Value Added Tax (VAT) Borne by the Government for economy class air tickets on domestic flights.

Through this policy, the VAT on the base fare and fuel surcharge is borne by the government, thereby suppressing the ticket prices paid by the public even as airline operating costs rise due to increases in aviation fuel prices.

“This facility applies to ticket purchases and flight implementations for 60 days, counted from one day after the date of promulgation, so that its benefits can be felt quickly and directly,” said Spokesperson for the Coordinating Ministry for the Economy, Haryo Limanseto, in an official statement on Saturday, 25 April 2026.

According to him, fiscal intervention is necessary to dampen ticket price pressures because aviation fuel contributes around 40 percent to the total operating costs of airlines.

To ensure targeted implementation, Air Transport Business Entities are required to report the utilisation of the VAT facility in an orderly and transparent manner in accordance with tax provisions. For flights outside the economy class, the VAT provisions remain applicable.

Previously, the government adjusted the fuel surcharge through Minister of Transportation Decree Number 83 of 2026 to 38 percent for jet and propeller aircraft, from the previous 10 percent for jets and 25 percent for propellers.

This combination of policies is aimed at maintaining the affordability of ticket prices, inter-regional connectivity, and the sustainability of the national aviation industry amid rising global energy prices.