Indonesia to Cut Airfare Tax to Cushion Fuel Surcharge Hike

Indonesia will slash the value-added tax on economy class tickets for two months to ease the burden of rising fuel surcharges on airfare to mitigate higher energy costs triggered by the Iran war.

Fuel surcharges will jump to 38% of the price of the most expensive airfare from 10%, Coordinating Economic Minister Airlangga Hartarto said at a briefing on Monday. The government, though, is absorbing some of the cost by implementing a temporary tax cut to ensure overall ticket prices do not rise by more than 13%, he said.