JAKARTA, Indonesia — Travellers flying within Indonesia over the Christmas and New Year holiday period can now benefit from a government-funded VAT incentive on domestic economy-class tickets.

Under Finance Ministry Regulation No. 77 of 2026, the government will cover 100 percent of the VAT due on the base fare and fuel surcharge of eligible scheduled domestic economy flights. The measure is intended to help reduce travel costs during one of Indonesia’s busiest holiday periods.

To qualify, tickets must be purchased between October 20, 2026 and January 10, 2027, with travel taking place between December 22, 2026 and January 10, 2027.

The incentive applies only to scheduled domestic economy-class flights. It does not mean the entire ticket becomes tax-free.

VAT on additional services such as extra baggage, seat selection and other optional purchases may still be charged to passengers.

For travellers in Bali, the measure could apply to domestic trips to destinations including Jakarta, Yogyakarta, Lombok, Labuan Bajo and other Indonesian cities, provided the ticket and travel dates fall within the eligible periods.

The scheme works through a government-borne VAT mechanism, meaning the tax that would normally be charged on the eligible base fare and fuel surcharge is covered by the government instead of the passenger.

Travellers should still check the final fare breakdown when booking, particularly if they add baggage, preferred seating or other services not covered by the incentive.

The regulation took effect on October 20 and applies specifically to the Christmas 2026 and New Year 2027 travel period.