Waive VAT on airline tickets and pursue premium tourism: Indonesia's plan to boost tourism

Jakarta — The government, through several related ministries, officially bears 100 percent value-added tax (VAT) on economy-class domestic air tickets. The VAT exemption for domestic economy-class tickets applies for 60 days until mid-June 2026, specifically from Saturday 25 April 2026 to Tuesday 23 June 2026. This step has been taken as a strategy to dampen the spike in air ticket prices driven by higher aviation turbine fuel (avtur) prices on the global market. In addition, the government also implements discounts or waivers on import duties for aircraft spare parts, which is expected to help airlines curb rising costs. “So it also helps travellers to obtain cheaper tickets,” said Widiyanti. Premium travellers refer to upper-class tourists who prioritise exclusive services and personal experiences while on holiday, as is currently becoming a trend, according to Widiyanti. In the face of geopolitical and global economic uncertainty, premium travellers are targeted because they are believed to maintain high purchasing power and relatively unaffected by increases in travel costs or economic fluctuations. “Indonesia is very rich and very beautiful. It is much sought after because now they (premium travellers) look at experiences rather than just beaches and mountains,” Widiyanti said. “But also how they can meet communities in Indonesia, which are famous for their very friendly people,” she added.