VAT Incentive Returns, Cheaper Airfares During School Holidays

JAKARTA. Airfare will become more affordable during the mid-year school holidays in 2025. The government will provide a tax discount on airline ticket purchases, aiming to ease the financial burden on the public while boosting the tourism sector.

The government will cover the Value Added Tax (VAT) on airline tickets, so passengers will not have to pay this tax component. This incentive is known as the VAT Borne by the Government (PPN DTP) scheme.

“Similar to what we had during previous major holidays. This is related to the school holiday period. Since Eid and New Year were too close together in the first quarter, we now need to provide support for the second and third quarters,” said Coordinating Minister for Economic Affairs Airlangga Hartarto in Jakarta, as quoted by kontan.co.id, Friday, May 23.

The tax discount will take effect on June 5, 2025, coinciding with the school year-end holidays and the start of a new academic year. The government hopes that this policy will increase public interest in travel and tourism.

Previously, the Ministry of Finance issued Regulation of the Minister of Finance (PMK) Number 18 of 2025, which set a 6% VAT discount for domestic economy class airline tickets. The regulation applies to ticket purchases between March 1 and April 7, 2025, for flights taking place between March 24 and April 7, 2025.

With the combination of the VAT borne by the Government (PPN DTP) incentive, reductions in aviation fuel (avtur) costs, and other efficiency measures, the public could enjoy a decrease in domestic economy airfare prices by as much as 13%–14%. (KEN)