Jakarta. Indonesia will introduce temporary tax subsidies for domestic economy-class airline tickets during the upcoming school holiday and year-end Christmas-New Year travel periods to support consumer spending and economic activity.

Chief Economic Affairs Minister Airlangga Hartarto said the government would cover part of the value-added tax (VAT) on domestic airfares to help reduce travel costs for the public.

The measure forms part of Indonesia’s second-half 2026 economic stimulus program, which seeks to sustain household purchasing power while boosting transportation, tourism, and consumption during major holiday periods.

“The government is preparing transportation discounts, including airfare discounts during the school holidays and also for Christmas and New Year,” Airlangga said after a coordination meeting in Jakarta on Tuesday.

For the mid-year school holiday season, the government has allocated Rp 190 billion ($10.6 million) for transportation discounts targeting more than 3 million beneficiaries.

The airfare tax subsidy for domestic economy-class flights will apply to travel scheduled between June 24 and July 5, 2026. The government estimates the program could lower ticket prices by around 5.1%.

Indonesia is also preparing a separate transport subsidy package for the Christmas and New Year holiday season. The government has allocated Rp 161.4 billion for the year-end program, targeting nearly 2.9 million beneficiaries.

Under the plan, the VAT subsidy for domestic economy-class flights will apply to travel between Dec. 22, 2026, and Jan. 10, 2027. Tickets eligible for the subsidy can be purchased from Oct. 20, 2026, through Jan. 10, 2027.

Indonesia has periodically introduced airfare discounts and tax incentives during peak travel periods to stimulate domestic tourism and ease transportation costs across the sprawling archipelago.