Airfare Hike; Minister Sri Mulyani Willing to Review Avtur VAT



Laila Afifa

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  • Finance Minister Sri Mulyani. Instagram

    Finance Minister Sri Mulyani. Instagram

    TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati announced the government’s willingness to review the value-added tax (VAT) on jet fuel or avtur and match it to other countries'.

    The price of avtur is blamed as the sole element of the current national airfares hike.

    “If the VAT is imposed equally, it will be applied uniformly. This is to prevent unhealthy competition between Indonesia and others,” said the minister today, Feb. 12.

    According to Minister Sri Mulyani, the government will compare Indonesia’s avtur VAT to those in other countries. This has been complained by the airline industry for quite a while as it burdens airlines after it is converted into airfares.

    “If it’s for a level playing field, we are willing to compare them to other countries such as Singapore and Malaysia,” said Sri Mulyani.

    The ongoing VAT on avtur for Indonesian airlines is 10 percent and has been imposed since 2003. Meanwhile, the avtur's VAT once distributed to neighboring countries in Southeast Asia remains under 10 percent.

    On Monday, President Joko “Jokowi” Widodo said that the monopoly and premium price of avtur sold by state-run energy company Pertamina caused domestic airlines to substantially increase its airfares.