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Making Flying Less Taxing

Indonesia Wants to Reduce Tax Burden of National Flight Schools.

(3/22/2010) The Minister of Transportation is seeking a tax exemption for all Indonesian flying schools on value added tax and luxury taxes.

To achieve this, the Director General of Air Communication, Herry Bakti S. Gumay, is asking flying schools to send formal requests for tax exemptions in order the strengthen his recommendation to the Minister of Finance seeking the subject exemption.

Gumay said: "flight schools should put forth requests for tax exemption. We can then seek the exemption on their behalf from the Minister of Finance."

The importation of small aircraft used to train Indonesian pilots is tied to current regulations which provide for charging luxury tax on all imported planes unless those planes are owned by the Nation or used for commercial aviation. Under these rules, training aircraft can be charged up to 50% of their value in luxury tax.

Indonesia is home to seven flying schools including the Curug Higher School of Aviation (STPI Curug), Aero Flyer Institute, Alfa Flying School, Deraya Flying School, Sekolah Tinggi Teknologi Adisucipto and the Bali International Flight Academy (BIFA).

Indonesia is currently suffering a severe shortage of trained pilots to fly the country's fast growing fleet of commercial aircraft.