Government to Cover 100% VAT on Economy Class Domestic Flight Tickets: When Does It Take Effect?

The government has officially taken on 100% of the Value Added Tax (VAT) for economy class tickets on domestic flights. This policy refers to Minister of Finance Regulation No. 24 of 2026. The step is intended as a strategy to curb the surge in flight ticket prices triggered by the rise in global avtur (aviation fuel) prices. “This facility applies for 60 days, starting from one day after the regulation is promulgated,” said Spokesperson for the Coordinating Ministry for the Economy, Haryo Limanseto, quoted from Kompas.com. Through this regulation, the government covers VAT on the base ticket fare and fuel surcharge costs. Thus, the price paid by the public can be kept down even as airline operating costs increase. Meanwhile, the VAT borne by the government includes the base ticket fare as well as the fuel surcharge. This discount does not cover additional baggage, seat selection, travel insurance, or premium meal or drink services. With increasing cost burdens, airlines are inevitably adjusting fares. Therefore, the government is taking balancing measures to protect the public. To ensure this policy runs accountably, airlines are still required to report the utilisation of the government-borne VAT facility in an orderly and transparent manner in accordance with tax regulations. Meanwhile, VAT for tickets outside economy class remains applied normally as an effort to make fiscal support more targeted and aimed at groups in need. In addition to the VAT facility, the government is also holding domestic flight fare increases to around 9% to 13%.