Indonesian Passengers Charged with Aircraft Leasing Tax

The Department of Transportation has confirmed the issuing of a 20 percent aircraft leasing tax, starting January 1, 2010, which has caused an increase for the price of economy class plane tickets. The taxation is arranged in the Regulation of the Director General of Taxation No. PER-62/PJ/2009 regarding the Prevention of Misuse of Double Tax Avoidance Agreements.

Directorate General of Air Transport from the Department of Transportation will include this tax component in the revision of the Ministerial Decree (KM) No. 9/2002 regarding passenger fares scheduled for commercial air transport in the domestic economy class.

Director General of Air Transport, Herry Bakti S. Gumay, stated that he will invite the Indonesia National Air Carriers Association (Inaca) to determine how much that tax component would increase the operational cost of airlines.

"We will discuss with Inaca how much the increase will b e. From the result we can determine how much the tax component that should be put into the revision of KM No. 9. If it's significant then we will put it in," Herry stated, Tuesday.

Herry thinks that the 20 percent tax from the aircraft leasing tariff will automatically increase the operational cost of airlines.