Minister of Tourism and Creative Economy, Sandiaga Uno, has expressed his support for the Ministry of Transportation’s proposal to eliminate taxes on airline tickets as a measure to reduce high ticket prices and boost potential tourism revenue.
“One of the main factors contributing to the high cost of air travel is the tax imposed on tickets,” Sandiaga said on Tuesday, August 6, 2024.
Sandiaga emphasized that increasing domestic tourist activity could have a significant positive impact on the local economy, potentially even surpassing the economic contributions from international tourists.
He suggested that any potential loss of state revenue from eliminating the airline ticket tax could be offset by the increased spending of domestic tourists at travel destinations.
Previously, the Ministry of Transportation’s Transportation Policy Agency (BKT) proposed the elimination of airline ticket taxes to create equal treatment with other modes of transportation that are already exempt from such taxes, as per Ministry of Finance Regulation No. 80/PMK.03/2012.
In addition to tax elimination, the Ministry of Transportation recommended several short-term policies, such as providing fiscal incentives for aviation fuel (avtur) and aircraft spare parts, as well as subsidies for airport service fees.
Another proposal was to revise the formula for calculating avtur prices based on the Energy and Mineral Resources Minister’s decision, with the goal of reducing operational costs for airlines.
These measures are expected to make airline tickets more affordable, thereby increasing domestic tourism and supporting the growth of Indonesia’s tourism and creative economy sectors.
