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View all search resultsGovt waives airfare VAT for Idul Fitri
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Motorists wait for the one-way traffic scheme implementation in Tasikmalaya regency, West Java, on March 29, 2025, during the Idul Fitri holiday season. (Antara/Adeng Bustomi)
T
he government has announced a temporary waiver on value-added tax (VAT) for airline tickets for the upcoming Idul Fitri holiday period, when travel demand spikes across the country.
Coordinating Economy Minister Airlangga Hartarto said the subsidy was expected to translate to an effective ticket price reduction of some 17 to 18 percent for travelers, even though the VAT rate on airfares is only 11 percent.
During the recent year-end period in late 2025, the government offered a partial VAT discount on airfares, reducing the share borne by consumers to 5 percentage points of the 11 percent rate.
“The ticket discount will be around 17 to 18 percent, with the VAT covered by the government. Last Christmas, it was 6 percent, but this time, it will be the full amount,” Airlangga said in Jakarta on Thursday, as reported by Bisnis.
The minister said the program was an effort to encourage public travel and economic growth in the first quarter of 2026, pointing out that the previous stimulus had been a key contributor to the 5.39 percent year-on-year (yoy) economic growth recorded in the fourth quarter of 2025.
“The program delivered results in the fourth quarter [of last year], so the government is pushing to replicate that success in the first quarter [of this year],” he added.
The legal basis for the VAT waiver will be stipulated in a forthcoming Finance Ministry regulation (PMK).
