High Airlines Tariff; Gov't Asked to Grant Tax Incentives

TEMPO.CO, Jakarta - Aviation observer from Indonesia Transportation Society, Suharto Abdul Majid, opined that one of the policies the government could take to lower the airlines tariff is to grant tax incentives for a number of aviation components.

"I dare [the government] to give zero percent tax for all airlines components, such as jet fuel or avtur, spare parts, airport services, and others, I challenge. I am sure it can significantly reduce (airfare) up to 40 percent," said Suharto in a phone call with Tempo, Sunday, June 23.

According to Suharto, the tax incentive provision is necessary rather than the government forced airliners to lower the ticket price because, at the same time, the government must maintain the healthy condition of the aviation industry.

"So the government must allocate incentives for business people, and business people must improve the quality of services, security, and safety," Suharto noted, adding that the disruption in the aviation industry would cause broad effect, including to the sector of the industry, tourism, trade, and others.

An economist from the Institute for Development of Economics and Finance (Indef), Bhima Yudhistira, shared the same statement. He agreed about tax incentives provision, so that airlines tariff could be cheaper.

“Landing fee, parking fee, and loading fee can also be cut,” he said. Besides, the impact of the tax incentives provision could instantly be felt by the industry players.

Previously, the government was formulating a draft bill to provide fiscal incentives to a number of services and activities related to the aviation industry. Coordinating Minister for Economic Affairs Darmin Nasution said that it was carried out to help improve cost efficiency in the aviation sector.

CAESAR AKBAR