The Indonesian government has issued Minister of Finance Regulation No. 43 of 2026 (PMK-43) as part of its economic stimulus package for the 2026 school holiday period. Under this regulation, the government provides a government-borne VAT (VAT DTP) incentive for the purchase of economy-class domestic commercial airline tickets during the school holiday period, with the objective of maintaining household purchasing power and supporting economic growth.
The government will bear 100% of the VAT payable on the base fare and fuel surcharge components of eligible domestic economy-class airline tickets.
The VAT DTP facility applies to:
Ticket purchases made from June 22 2026 through July 5 2026; and
Flights operated between June 24 2026 and July 5 2026.
The government will not bear the VAT on a domestic flight if:
The ticket is purchased or the flight is operated outside the prescribed purchase and travel periods;
The passenger does not travel in economy class; or
The taxable entrepreneur (pengusaha kena pajak, or PKP) fails to submit the required electronic detailed list of government-borne VAT transactions within the deadline stipulated under the regulation.
From a tax administration perspective, air transportation companies registered as PKPs are still required to issue VAT invoices or other documents deemed equivalent to VAT invoices and report the relevant transactions in their monthly VAT returns in accordance with the applicable regulations.
For eligible transactions, the VAT should be reported as services benefiting from the VAT DTP facility. Transactions that do not meet the eligibility requirements must be reported as taxable supplies subject to the normal VAT collection mechanism.
In addition to the monthly VAT return reporting obligation, PMK-43 requires airlines to submit a detailed electronic list of government-borne VAT transactions to the Directorate General of Taxes no later than September 30 2026.
PMK-43 became effective on June 22 2026, the date on which it was promulgated.
Law No. 4 of 2026: protections for special debt securities investors
The Indonesian government has enacted Law No. 4 of 2026 (Law 4/2026) as an amendment to Law No. 4 of 2023 concerning the Development and Strengthening of the Financial Sector. One of the main changes introduced through this law is the granting of authority to the Badan Pengelola Investasi Daya Anagata Nusantara, the Indonesian sovereign investment management institution, to issue debt instruments in accordance with statutory provisions. These instruments include general debt securities as well as special debt securities, such as Patriot Bonds and Merah Putih Bonds, which are expected to expand national financing alternatives and support financial market deepening.
One of the key provisions drawing attention is the provision of legal protection for investors who purchase special debt securities. This protection includes immunity against general and special criminal charges, such as criminal provisions in the field of taxation, as well as civil lawsuits related to transactions involving these instruments. Furthermore, data and information arising from these special debt securities cannot be used as a basis for tax assessment or as evidence in judicial proceedings.
Law 4/2026 also reaffirms that investors – including taxpayers who have participated in the Tax Amnesty Programme or the Voluntary Disclosure Programme – can still transfer or pledge these special debt securities without affecting their ownership rights over the instruments. However, provisions regarding the tax treatment of income generated from these instruments have not been specifically regulated under this law and remain subject to future implementing regulations.
Overall, Law 4/2026 provides legal certainty for the issuance of and investment in special debt securities as new financing instruments. Further provisions regarding the issuance mechanism, management, execution of the instruments, and other matters will be set forth in a government regulation.
This law became effective on June 16 2026.
