Jakarta, April 26 -- The Indonesian government has issued a regulation to cover value added tax (VAT) on economy-class domestic flight tickets, aiming to reduce airfares amid rising aviation fuel costs.

The policy covers VAT on base fares and fuel surcharges, easing ticket prices for the public as airlines face higher operational costs due to surging fuel prices.

"The facility applies to tickets purchased and flights taken within 60 days, starting one day after the regulation was enacted," Coordinating Ministry for Economic Affairs spokesperson Haryo Limanseto said in Jakarta on Sunday.

He said fiscal intervention is crucial to ease airfare pressures, as fuel accounts for about 40 percent of airlines' operational costs.

Airlines are r...