Government to Fully Cover VAT on Domestic Economy Flight Tickets Until 5 July

Jakarta, CNBC Indonesia - Finance Minister Purbaya Yudhi Sadewa has officially issued Finance Ministerial Regulation (PMK) Number 43 of 2026 regarding the Value Added Tax (VAT) on flight tickets borne by the government for the 2026 school holiday period. In the regulation, enacted on 22 June 2026, the VAT borne by the government (DTP) is set at 100 percent. This DTP VAT applies to the tax payable on the supply of scheduled domestic commercial economy class air transport services. “It is the VAT payable on the base fare and fuel surcharge,” as stated in Article 2 of PMK 43/2026, cited on Wednesday (24/6/2026). The regulation stipulates that the VAT payable and borne by the government is granted to service recipients for ticket purchases made from 22 June 2026 to 5 July 2026, with the flight period running from 24 June 2026 to 5 July 2026. Air transport business entities or airlines, as Taxable Entrepreneurs providing scheduled domestic commercial economy class air transport services, are required to issue a Tax Invoice or a specific document treated as equivalent to a Tax Invoice and submit a Periodic VAT Return in accordance with tax laws and regulations. An example scheme for the VAT DTP on flight tickets is provided: PT CXA, an air transport business entity, supplies a scheduled domestic commercial economy class service from Jakarta to Surabaya to Mr. JK. Mr. JK purchases a ticket on 29 June 2026 for a flight on 1 July 2026 at a price of Rp1,136,756.00. The ticket cost components are: base fare Rp790,000.00; fuel surcharge Rp121,600.00; IWJR fee Rp5,000.00; passenger service charge Rp119,880.00; and VAT Rp100,276.00. Based on this data, the VAT payable of Rp100,276.00 is fully borne by the government because the purchase and flight dates meet the incentive period requirements. The regulation also provides an example where VAT is not fully covered: PT QWE supplies a service from Jakarta to Surabaya to Mrs. AP. She buys a ticket on 25 June 2026 for a flight on 4 July 2026 at a price of Rp1,261,756.00. The components are: base fare Rp790,000.00; fuel surcharge Rp121,600.00; IWJR fee Rp5,000.00; passenger service charge Rp119,880.00; VAT Rp100,276.00; extra baggage (including VAT) Rp75,000.00; and seat selection (including VAT) Rp50,000.00. The total VAT payable is Rp112,663.00, comprising Rp100,276.00 on the base fare and fuel surcharge, Rp7,432.00 on extra baggage, and Rp4,955.00 on seat selection. The government only bears the Rp100,276.00 VAT on the base fare and fuel surcharge, while the VAT on extra baggage and seat selection remains payable by the passenger.