Aviation Incentive; Domestic Airlines Exempted from VAT



Laila Afifa

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  • TEMPO.CO, Jakarta - The government has decided to provide tax incentives to airlines. That way, it is expected that airlines would be able to lower ticket prices.

    The incentive in the form of exempting the Value Added Tax (VAT) for domestic airlines renting planes from overseas companies.

    Hestu Yoga Saksama, the Tax Directorate's director of counseling, services and public relations, said that the policy is set to boost the competitiveness of the transportation industry. It is also done to provide legal certainties in tax-free policies for certain transportation modes and services related to certain transportation equipment.

    "Just as in previous regulations, this facility is also eligible for sea and river transport vessels and their spare parts, aircraft and spare parts, as well as trains and spare parts," Hestu said through an official statement on Friday, July 19.

    This rule is stipulated in Government Regulation (PP) no.50/2019 that was passed on July 8, 2019. The rule will take effect on September 6, 2019.