Government to Cover 6% VAT on Economy Class Airfares During Year-end Holiday

The government has officially granted a Government-Borne Value Added Tax (VAT DTP) facility of 6% for the purchase of economy class airline tickets, as part of a policy to support public mobility during the Christmas and New Year (Nataru) holidays.
This policy is regulated under Minister of Finance Regulation (PMK) Number 71 of 2025, which applies to ticket purchases and flight schedules between October 22, 2025, and January 10, 2026.
Under this policy, the government covers 6% of the 11% VAT rate, so passengers are only required to pay 5% VAT on the ticket price. The taxable base for the calculation includes the base fare, fuel surcharge, and other charges subject to VAT.
This policy is expected to reduce travel costs and increase public purchasing power, especially during the year-end holiday season, which typically sees a surge in ticket prices.
Provisions on Tax Invoices and Reporting
Airlines, as VAT-Registered Persons (PKP), are still required to issue tax invoices for each transaction. In these invoices, the VAT payable must be stated at 5% of the taxable base, reflecting the portion paid by the passenger.
In addition, airlines must report both the VAT payable and the government-borne VAT (VAT DTP) in their VAT Periodic Tax Return (SPT Masa PPN). The report must be submitted in aggregate form and accompanied by detailed transaction information, including:
- name, address, and tax identification number (Tax ID number) of the air transport business entity;
- the month the ticket was issued by the airline;
- ticket booking reference;
- date of ticket purchase by the service recipient;
- flight date of the service recipient;
- tax base, i.e., the amount stated on the ticket;
- VAT payable;
- VAT payable collected from the service recipient; and
- VAT payable is borne by the government.
The detailed list of VAT DTP transactions must be submitted no later than April 30, 2026, through the official website of the Directorate General of Taxes (DGT).
If an airline fails to submit the report as required, the government-borne VAT facility will be deemed invalid, and the VAT on the ticket must be paid in full at 11% of the taxable base.
This policy serves as a fiscal stimulus measure by the government to maintain economic stability and support the air transportation sector ahead of the year-end holiday season. (ASP/KEN)