Avtur and VAT are the culprits of high airfares, Minister of Transport: I Have Met with Mr Luhut
Minister of Transportation (Menhub) Budi Karya Sumadi revealed that the high price of domestic flight tickets was due to aviation fuel prices, aircraft parts import taxes, and Value Added Tax (VAT).
"Actually, I repeatedly think that if the price is not only because of us, there are four which if the price can be completed, one is the same avtur as other countries," said Budi Karya as quoted by ANTARA, Tuesday, October 1.
According to him, if the price of aircraft fuel or aviation fuel can be the same as other countries, then it can lower the price of aircraft tickets in the country.
Regarding the price of the avtur, the Minister of Transportation admitted that he had held a meeting with the Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Luhut Binsar Pandjaitan regarding price improvements.
"And other countries have multi-providers. I immediately pointed out that one provider made a monopoly price. I have had a meeting with Pak Luhut," he said.
The second point mentioned by the Minister of Transportation is the tax on the spare parts or spare parts of the imported aircraft.
"Our share parts are taxed, Singapore, Malaysia is not taxed. Well, imagine if we have 400 planes. Now this is said to be almost finished, he said. It must be resolved," he asserted.
The third point that is in the spotlight of the Minister of Transportation is related to the imposition of a value added tax (VAT) for passengers and avtur.
For him, this is irrelevant because aircraft transportation has become a primary requirement.
"The VAT on this plane was hit 10 percent. When I was a child, I saw that the plane was already really great, now we are using 737 Boeing aircraft, it has become a primary need. So it is irrelevant if he is subject to VAT," he said.
Meanwhile, the fourth thing emphasized by Budi Karya so that plane tickets can be lowered is the need for strong synergy and collaboration.
"One more thing we have to coordinate that we must collaborate with each other to contribute, otherwise it will not be finished," he concluded.