Indonesia's government will temporarily absorb the full VAT on domestic economy flights purchased between 25 April and 23 June 2026, shielding travellers from rising airfares caused by surging global aviation fuel costs while helping airlines remain commercially viable.
Indonesia has introduced a temporary tax break for domestic air travellers as rising global aviation fuel costs threaten to make flights unaffordable for many citizens. The Finance Minister Regulation Number 24 of 2026 (PMK-24), issued on 24 April 2026, allows the government to absorb 100% of the Value Added Tax on qualifying domestic flights.
The relief applies to economy class tickets purchased between 25 April and 23 June 2026 for travel within the same timeframe.
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 established under Finance Ministry Regulation Number 131 of 2024.
Airlines must issue special VAT invoices indicating government-borne tax for eligible tickets. For all other transactions, standard VAT documentation showing the 11% rate applies.
Carriers benefiting from this 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 31 July 2026.
The initiative aims to help airlines maintain commercial viability during unprecedented cost increases while shielding the public from sharp fare hikes that could limit travel accessibility.
Earlier, Indonesia’s Finance Ministry issued Regulation Number 4 of 2026 on 6 February 2026, eliminating VAT on eligible domestic flights during the Eid al-Fitr period to encourage consumer spending and stimulate economic activity, with the government covering the full tax amount.
