PMK 77/2026: the government bears 100% of the VAT on domestic economy-class flights bought from 20 October 2026 for travel from 22 December 2026 to 10 January 2027

Finance Minister Regulation PMK 77/2026, signed on 12 October 2026 and promulgated on 20 October 2026, when it took effect, makes VAT on scheduled domestic economy-class air transport a government-borne item (PPN DTP) for budget year 2027. The government bears 100% of the VAT on the base fare and the fuel surcharge for tickets bought from 20 October 2026 to 10 January 2027 for flights from 22 December 2026 to 10 January 2027. The airline issues the tax invoice or equivalent document, reports the borne VAT in its monthly VAT return and files a transaction list electronically with DJP by 31 March 2027. Because the rule took effect on 20 October, before we published it, this entry is dated as a late discovery. The Coordinating Minister for Economic Affairs described the Christmas and New Year transport incentive, which includes government-borne VAT on domestic air travel, at the 21 October cabinet session.

Key points

• Instrument: Finance Minister Regulation PMK 77/2026 on value-added tax on the supply of scheduled domestic economy-class air transport services during the Christmas and New Year period borne by the government for budget year 2027. Signed by Finance Minister Suahasil Nazara on 12 October 2026, promulgated on 20 October 2026 and in force from that date (Article 8); State Bulletin (Berita Negara) 2026 No. 715.
• Scope (Articles 2 and 3): VAT is due on the service as usual; for budget year 2027 the government bears 100% of it, limited to the VAT on the base fare and the fuel surcharge. It applies to the buyer of the service for tickets bought from 20 October 2026 to 10 January 2027 and flights from 22 December 2026 to 10 January 2027. Both conditions are needed.
• Not covered (Article 6): services outside the purchase period or flight period, flights not in economy class, and cases where the airline files its transaction list after the deadline; VAT is then charged under the ordinary rules.
• Airline obligations (Articles 4 and 5): the airline, as a taxable entrepreneur, issues a tax invoice or the ticket as a document treated as one, shows the borne VAT, reports it in its monthly VAT return as a lump sum, and files a transaction list electronically through DJP's website by 31 March 2027. The list includes the booking reference, departure and arrival airports, purchase and flight dates, the tax base and the borne VAT.
• Calculation of VAT itself follows PMK 131/2024 (Article 2(2)); the regulation's annex gives worked examples of tickets that do and do not qualify, which we have not read.
• Context: the Coordinating Minister for Economic Affairs listed a holiday transport incentive among the Q4 2026 stimulus measures at the 21 October cabinet session, including a 30% discount on transport tickets, a 30% discount on ship fares, special port service prices from ASDP and government-borne VAT on domestic air travel, reaching 16.6 million people at about Rp883.4 billion (ifakta.co, 26 October); the sources do not give the legal basis for the discounts other than PMK 77/2026 for air travel.

Sources

• Kementerian Keuangan — PMK 77 Tahun 2026 tentang PPN atas Penyerahan Jasa Angkutan Udara Niaga Berjadwal Dalam Negeri Kelas Ekonomi pada Periode Libur Natal dan Tahun Baru yang Ditanggung Pemerintah Tahun Anggaran 2027 (ditetapkan 12 October, diundangkan 20 October 2026; text via Ortax database)
• ifakta.co — Pemerintah Siapkan Empat Stimulus Ekonomi Kuartal IV, Ini Rincian Bantuan dan Diskonnya (07:12 WIB, 26 October 2026; Airlangga Hartarto at the 21 October cabinet session)