Indonesia’s government has moved to cover the full 11% value-added tax on economy-class domestic air tickets for 60 days, shielding travellers from sharp fare increases driven by surging aviation fuel costs, Antara News reported on April 26.
The policy, enacted on April 24 under Finance Minister Regulation No. 24 of 2026 (PMK-24), covers VAT on both base fares and fuel surcharges, easing ticket prices for the public as airlines face higher operational costs due to surging fuel prices. Mirage News
“The facility applies to tickets purchased and flights taken within 60 days, starting one day after the regulation was enacted,” Coordinating Ministry for Economic Affairs spokesperson Haryo Limanseto said in Jakarta.
He said fiscal intervention was crucial to ease airfare pressures, as fuel accounts for about 40% of airlines’ operational costs.
The tax benefit covers only the base fare and fuel surcharge. Additional charges, including seat selection and extra baggage, remain subject to the standard 11% VAT rate. Standard VAT rules also remain in place for business and first-class cabins.
The policy follows an earlier move to set the fuel surcharge cap at 38% for both jet and propeller aircraft, up from 10% and 25% respectively. The government has also capped domestic fare increases at between 9% and 13%.
Airlines benefiting from the scheme must submit transaction lists to the Directorate General of Taxes by the month-end following each VAT reporting period, with a final deadline of July 31, 2026. ch-aviation
The intervention is the second of its kind this year. Earlier in the year, during the Eid travel period, the government had already introduced a full government-borne VAT incentive for domestic economy airfares, formalised under Finance Ministry regulation PMK-4/2026, which applied to both base fares and fuel surcharges but excluded optional extras such as baggage and seat selection.
The government said the regulation was intended to ensure targeted, effective, and sustainable support, while shielding the public from rising global energy prices.