Indonesian President Joko Widodo set a fiscal incentives for airlines to lowering the domestic airfare tariff - Photo by CMEA Office

JAKARTA (TheInsiderStories) – Indonesian President Joko Widodo immediately set a fiscal incentives for airlines to lowering the domestic airfare tariff. The fiscal incentives were given in the next two days.

Secretary of Coordinating Economic Affairs Ministry Susiwijono Moegiarso said yesterday (07/10), president had signed the revision of Government Regulation Number 69 Year 2015, which regulated import and certain transportation equipment delivery, as well as taxable services related to certain transportation equipment.

“The rule was made to support aircraft industry both in terms of operators and all other relevant agencies,” he told media at his office.

Moegiarso added, fiscal incentives mean no value-added tax levy for rental services, aircraft maintenance and repairs, airplane rental services from abroad, import and delivery of aircraft, also spare parts.

Head of Fiscal Policy Office at the Finance ministry Suahasil Nazara added, that fiscal incentives for aviation industry had actually been give through Finance Minister Regulation Number 35 Year 2016. Its regulates exemption of import duty on imports of goods and materials intended for repairs or aircraft maintenance.

“Airplane rental services from abroad are also not subject to Value-added tax in other countries. So this is also in an effort to encourage competitiveness of Indonesian airlines,” he noted.

Previously, Government sets 30 percent tax for flight tickets. High cost of airplane ticket since November last year does affect number of domestic air transport passengers.

According to Transportation Minister Budi Karya Sumadi low tariff policy has been taken to push the flight passenger increase. He  explained that low-cost tickets quota was provided on Tuesday, Thursday and Saturday in a week. Aircraft type for cheap flights is a jet type and not propellers type.

From the schedule, Citilink Airlines from PT Garuda Indonesia Tbk (IDX: GIAA) prepared 62 cheap flights on Tuesday, Thursday and Saturday. Seat total is 3,348 but depends on the flight condition. Meanwhile Lion Air Group there will be 146 flights per day with 8,278 seats.

Moegiarso revealed the provision of low-cost airplane tickets will be implement on Thursday, July 11, 2019. “About the flight route will be announced before Thursday” he explained.

Written by Willy Matrona, Email: theinsiderstories@gmail.com