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Sri Mulyani Signs PMK 18/2025, Government Covers 6 Percent Of VAT On Airline Tickets During Eid Period
Wednesday, 05 Mar 2025
The government through the Ministry of Finance provides value added tax (VAT) incentives for domestic scheduled economy class commercial air transportation services. Through this policy signed by the Minister of Finance Sri Mulyani Indrawati, the government covers part of the VAT on domestic air tickets by 6 percent, so that the public will only be charged 5 percent VAT.
The rules regarding this incentive are stated in the Regulation of the Minister of Finance (PMK) Number 18 of 2025 which was promulgated on February 28, 2025. "Considering, that in order to encourage economic growth and assist the public in meeting the needs of the Eid homecoming.
The government provides fiscal stimulus on national religious holidays in the form of value added tax incentives for the provision of domestic scheduled economy class commercial air transportation services. "Borne by the government in the 2025 budget year," reads PMK 18/2025, quoted Saturday, March 1, 2025.
Article 2 paragraphs (3) and (4) state that VAT on scheduled domestic economy class commercial air transportation services which should be charged at 11 percent will be borne by the government at 6 percent of the replacement, while 5 percent remains charged to the service recipient.
"The replacement as referred to in paragraphs (3) and (4) includes the base fare, fuel surcharge, and other costs paid by the service recipient which are the object of VAT and are services provided by the Air Transportation Business Entity," reads Article 2 paragraph (5) in the policy.
PMK 18/2025 will come into effect on March 1, 2025. The VAT charged to the government will only be given to the service recipient for the ticket purchase period made since the PMK came into effect until April 7, 2025. In addition, the VAT borne by the government is 6 percent also only valid for the flight period from March 24, 2025 to April 7, 2025.
Meanwhile, Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono alias AHY announced a 13 percent reduction in domestic flight ticket prices. This rate cut is valid during the Lebaran homecoming period for departures from March 24 to April 7, 2025.
AHY said the reduction in flight ticket prices was decided after the government was able to reduce airport costs, reduce aviation fuel prices at 37 airports, and reduce fuel surcharges. Previously, during the Christmas 2024 and New Year 2025 periods, the government reduced flight ticket prices by 10 percent.
