Planning to fly home for Eid? Here’s some good news! The government is offering a 6% Value-Added Tax (VAT) incentive on economy-class flight tickets, effectively reducing the tax burden on travelers. Under this scheme, passengers will only need to pay 5% VAT on their airfare, making flights more affordable during the homecoming (mudik) season. This initiative aims to ease travel expenses and support those returning to their hometowns for the holiday.

VAT Discount Eligibility and Period

This incentive is regulated under Minister of Finance Regulation (PMK) No. 18 of 2025 and applies to the following periods:

• Ticket purchase period: March 1, 2025 – April 7, 2025
• Flight period: March 24, 2025 – April 7, 2025

The 6% VAT covered by the government is calculated based on the ticket price, which includes components such as the base fare, fuel surcharge, extra baggage fees, and seat selection fees. However, this incentive does not apply to charges that are not subject to VAT, such as airport tax (PSC).

Example of VAT Discount Calculation

To illustrate how this incentive works, let’s consider an example:

A passenger purchases an economy-class ticket for Rp1,350,000 on March 26, 2025, for a flight on March 30, 2025. The calculation is as follows:

• The ticket price includes an airport tax of Rp150,000, which is excluded from VAT calculations.
• The taxable amount (base fare, fuel surcharge, extra baggage, and seat selection) is Rp1,200,000.
• The VAT payable by the consumer: 12% × Rp500,000 = Rp60,000
• The VAT covered by the government: 12% × Rp600,000 = Rp72,000
• The total amount payable by the consumer with the VAT incentive: Rp1,350,000 + Rp60,000 = Rp1,410,000

For comparison, if the VAT incentive was not available, the calculation would be:

• Full VAT payable by the consumer: 12% × Rp1,200,000 = Rp144,000
• Total payment without the VAT incentive: Rp1,350,000 + Rp144,000 = Rp1,494,000

With the VAT incentive, the passenger saves Rp84,000 on the total fare.

Terms and Conditions

To benefit from this incentive, passengers must meet the following conditions:

• Tickets must be purchased between March 1 – April 7, 2025.
• Flights must take place between March 24 – April 7, 2025.
• The incentive only applies to economy-class flights.
• VAT-registered businesses (Pengusaha Kena Pajak/PKP) must report VAT DTP transactions by June 30, 2025.

If any of these conditions are not met, the VAT incentive will not apply.

This policy is expected to make airfare more affordable and encourage more people to travel at lower costs. Don’t miss this opportunity to book your flights at a discounted price!

economy-class-flights , eid-homecoming , government-incentive , vat-discount