Japan will further relax the tax-free shopping policy for tourists and plans to implement it in 2018
Japan's Ministry of Finance and Tourism Agency will expand the consumption tax exemption system for visiting foreigners shopping in Japan, according to Japanese media reports. Foreigners visiting Japan will be able to enjoy the tax exemption on purchases of general goods and consumables as long as the total amount of purchases exceeds 5,000 yen (about 293 yuan).
Previously, the amount spent on general goods and consumables in Japan needed to be calculated separately, and only if they were over 5,000 yen each could they be exempted. In the future, the tax exemption system will be relaxed up to the limit of 500,000 yen (about 29,300 yuan). The move is aimed at boosting spending demand among tourists visiting Japan.
After consultation with Japan's ruling party Tax Investigation Committee, the new tax exemption system will be included in the 2018 tax reform, which is scheduled to be implemented in the summer of 2018.
According to reports, when foreign visitors to Japan shop in Japan, general goods such as clothing and crafts, and consumables such as cosmetics and food need to buy more than 5,000 yen each to enjoy the tax exemption. After the adjustment, visitors can enjoy duty-free purchases as long as the total amount of purchases exceeds 5,000 yen.
For example, tourists who previously bought 3,000 yen (about 176 yuan) of shirts and 2,000 yen (about 117 yuan) of snacks will not be able to enjoy the tax exemption. However, as a condition, consumables purchased must be wrapped in clear plastic bags. Businesses and retail outlets will also be urged to make in-store sales staff thoroughly aware of operating methods and procedures in advance.
According to the Japan Observatory, the number of duty-free shops in Japan reached 40,532 in April 2017. The number has increased about 10 times in five years. Although the group travel boom has come to an end, individual travel consumption is still strong. From January to September, tourists spent 3.2761 trillion yen, a record high.
In order to further arouse the demand for shopping, there are voices calling for the combination of general goods and consumables.
It is reported that the Japanese government and the ruling party have lowered the minimum duty-free limit for general goods from 10,000 yen to 5,000 yen in May 2016. In response to the tax reform for 2018, the Japan Tourism Agency is discussing the imposition of a "departure tax." It plans to charge 1,000 yen (about 59 yuan) for each person leaving the country, and the money will be used for financial resources such as infrastructure construction.
The move is expected to be combined with an expansion of tax exemptions to boost Japan's tourism industry.