Govt to Review Jet Fuel Tax
Minister of Finance Sri Mulyani Indrawati said that the Government would review Value Added Tax (VAT) of jet fuel to overcome the recent flight price hike.
“We will review jet fuel VAT to avoid unhealthy competition between Indonesia and other countries, “Sri Mulyani said in Jakarta, Tuesday (12/2).
The Minister went on to say that the Government would compare the jet fuel VAT in Indonesia with the VAT in other countries.
“Under a level of playing field principle, we are ready to compare (the tax) with other countries such as Singapore or Malaysia,” she said.
For the record, the jet fuel VAT in Indonesia reaches 10% and has been applied since 2003 while several neighboring countries in the Southeast Asia apply single digit jet fuel VAT.
Previously, President Joko Jokowi Widodo said that he has received many complaints regarding the high price of domestic flights airline tickets. According to the President, the price increase is due to higher price of jet fuel in Indonesia.
Jet Fuel distribution at Soekarno-Hatta Airport is monopolized by Pertamina, President Jokowi said during the 50th Anniversary Gala Dinner of the Association of Indonesian Hotels and Restaurants (PHRI) at Grand Sahid Jaya, Jakarta, Monday (11/2).
The President added that the jet fuel price should be the same as international price or the Government will let competitors enter the market. (ANT/ES)
Translated by: Ridwan Ibadurrohman
Edited by: Mia Medyana