Indonesia Issues Regulation on VAT Incentives for Economy Class Airline Tickets

The Indonesian Government March 7 issued Ministerial Regulation No. 18/2025, on VAT incentives for economy class airline tickets. The regulation includes measures to: 1) specify that the VAT payable is borne by passengers for the provision of scheduled domestic economy class commercial air transportation services by an air transportation business entity and is 5 percent of the reimbursement; 2) specify that the VAT payable by the government (VAT DTP) on the provision of the specified services by air transportation business entities is 6 percent of the reimbursement; 3) explain that the reimbursement includes the base fare, fuel surcharge, and other ...