VAT Exemption on Domestic Flight Tickets Could Boost Mobility and National Economy

Jakarta – A plan to exempt domestic flight tickets from Value Added Tax (PPN) is considered a positive step towards improving the accessibility of air transport for the Indonesian public. Aviation analyst Alvin Lie stated that this policy has the potential to make ticket prices more affordable, strengthen inter-regional connectivity, and drive national economic growth through increased public mobility. As an archipelagic nation, Indonesia is heavily dependent on air transport to connect its various regions. “Affordable ticket prices are a crucial factor in supporting the movement of people, the distribution of economic activity, and the development of the tourism sector in various areas,” Alvin said in a statement on Saturday, 13 June 2026. By reducing the cost burden on passengers, the VAT exemption policy is expected to boost public interest in using air transport. An increase in domestic travel will have a positive impact not only on the aviation industry but also on related sectors such as tourism, hospitality, culinary, logistics, and MSMEs. Alvin believes the current imposition of VAT on domestic flight tickets is a policy that needs re-evaluation, pointing to a discrepancy in treatment between domestic and international flights. “The imposition of VAT on domestic tickets is an anomaly because international flights are not subject to VAT, so why are domestic flights taxed?” he questioned. He also highlighted that other public transport modes are not subject to VAT for passenger services. “Other public transport is not charged VAT. Even the most luxurious trains and buses, whose ticket prices approach those of low-cost carrier economy class, are not subject to VAT. So why are flight tickets taxed?” he added.