Tourism minister supports proposal eliminating airline ticket taxes

Jakarta (ANTARA) - Tourism and Creative Economy Minister Sandiaga Salahuddin Uno agreed on the proposal to eliminate airline ticket taxes in order to reduce ticket prices.

"I agree with the proposal. One of the contributors to expensive ticket prices is the tax," he stated on Tuesday.

The minister emphasized the impact of the domestic tourist movement on the local economy.

Their spending, according to him, could be higher when compared to foreign tourists.

The minister said the economic impact brought by domestic tourists to the destination areas could replace state revenue lost from eliminating airline ticket taxes.

"We should find a policy mix to make up for the loss of tax from airline tickets, but (state revenue) actually increases from the movement of domestic tourists," he said.

Earlier, the Transportation Policy Agency (BKT) of the Ministry of Transportation disclosed the results of a joint study by stakeholders regarding the reduction in airline ticket prices.

Through the study, the Ministry of Transportation proposed the elimination of ticket taxes for airplanes, for equal treatment with other modes of transportation having their tax eliminated, based on PMK Number 80/PMK.03/2012.

The ministry also detailed short-term policies to be implemented in stages, namely by providing fiscal incentives for the cost of aviation fuel, aircraft spare parts, and subsidies from airport service providers for the cost of aircraft landing, placement, and storage services (PJP4U).

Furthermore, the Ministry of Transportation recommends eliminating constants in the aviation fuel calculation formula.  ​​​​​​​