The policy covers VAT on base fares and fuel surcharges, easing ticket prices for the public as airlines face higher operational costs due to surging fuel prices.
“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 on Sunday.
He said fiscal intervention is crucial to ease airfare pressures, as fuel accounts for about 40 percent of airlines’ operational costs.
Airlines are required to report the use of the VAT facility in a timely and transparent manner, in line with prevailing tax regulations.
Standard VAT rules remain in place for non-economy classes.
The regulation, enacted on April 24, is intended to ensure targeted, effective, and sustainable government support.
The government is also seeking to shield the public from rising global energy prices, including higher aviation fuel costs driving up fares.
“The government has prepared mitigation measures to maintain the sustainability of the aviation industry and keep fares affordable, by limiting domestic fare increases to between 9 and 13 percent,” Limanseto said.
The policy follows an earlier move to set the fuel surcharge cap at 38 percent for both jet and propeller aircraft, up from 10 percent and 25 percent, respectively.
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Translator: Bayu Saputra, Raka Adji
Editor: Anton Santoso
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