The Coordinating Ministry for Economic Affairs of the Republic of Indonesia announced a stimulus initiative aimed at maintaining national economic growth in the second quarter at around 5% (10/6).

The program was decided in a Limited Cabinet Meeting led by President Prabowo Subianto on June 2, 2025.

It was followed by a press briefing involving the Minister of Finance, the Minister of Agriculture, the Minister of Social Affairs, and the Head of Statistics Indonesia (BPS).

The stimulus includes five policy packages: Transportation Discounts, Toll Tariff Discounts, Expansion of Social Assistance, Wage Subsidy Support, and Extension of Work Accident Insurance Contribution Discounts.

6% VAT on Domestic Economy Flights Covered by Government

As part of the Transportation Discount package, the government introduced a VAT Borne by Government (VAT DTP) incentive of 6% for domestic economy-class flight tickets.

The policy is regulated under the Ministry of Finance Regulation (PMK) Number 36 of 2025, issued on June 4, 2025.

Under this scheme, the public will only pay 5% VAT instead of the full 11%, with the remaining 6% subsidized by the government.

The total budget allocated for this incentive is IDR 430 billion.

The VAT incentive applies to ticket purchases and flights made during the period from June 5 to July 31, 2025.

Minister Highlights Policy Objective to Boost Mobility and Stability

“This incentive is a follow-up to the directive of President Prabowo Subianto and the result of coordination across ministries and agencies, aimed at maintaining the momentum of national economic growth and strengthening economic stability,” said Coordinating Minister for Economic Affairs Airlangga Hartarto.

Through this measure, the government expects to encourage increased public mobility during the June–July period.

The anticipated rise in activity is expected to have a positive impact on the domestic transportation and tourism sectors.

PHOTO: UNSPLASH

This article was created with AI assistance.