Tourism contribution expected to come from the State Budget

  • 30 Apr 2024

This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Investor Daily - Iuran pariwisata diharapkan dari APBN

30 April 2024

Jakarta, ID – The Tourism and Creative Economy Ministry hopes that the tourism fee can come from the state budget (APBN), not an increase in airfare.

“We want some kind of tourism fund, similar to other countries. It can ideally come from the APBN. [Tourism and Creative Economy Minister] Sandi gave the directive,” Tourism and Creative Economy Adyatama Nia Niscaya said in Jakarta on Monday (29/4/2024).

She explained that the plan to increase airfare by US$2-3 was still being discussed. “The plan to increase airfare by several dollars is still being discussed. It has not been followed up further,” Nia continued.

She stressed the importance of discussing government policies across ministries and carefully studying them. As a result, the process of implementing the tourism fee is still long.

“This means time and harmonisation are required. So, the road is still long,” Nia stated.

Previously, the Indonesian National Air Carriers Association (INACA) responded to the proposal of imposing the tourism fee on airfare.

INACA Chairperson Denon Prawiraatmadja said that the plan could burden passengers as airfare would be more expensive.

“Airlines will also be impacted as passengers will decrease if airfare is expensive,” Denon stated.

He said that the tourism fee could not be imposed on airfare as not all passengers travel for tourism purposes.

There are those who travel for business, work, family matter, or private reasons. Moreover, airlines are currently lacking aircrafts, spare parts, and human resources.

“Operating costs are also currently increasing amid the weakening rupiah as jet fuel, aircraft lease, maintenance, and spare part procurement use US dollars,” Denon said.

Meanwhile, the upper limit for airfare has not been adjusted by the government since 2019, while costs of several flight components have increased. The exchange rate of rupiah in 2019 was Rp14,102 per US dollar, but now it has surpassed Rp16,182 per US dollar.

He continued that the global oil price also increased from US$67 per barrel in 2019 to US$87.48 per barrel.

“Therefore, burdening the tourism fee on airfare will be detrimental as airfare will increase and passengers will decrease. The business condition of airlines is also currently in a poor condition, so the government’s air transportation connectivity expansion programme might not be realised,” Denon said.

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