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Japan to relax tax-free shopping rule for foreign visitors from July

News Desk

Kyodo News

Tokyo | Fri, June 29, 2018 | 11:06 pm
Japan to relax tax-free shopping rule for foreign visitors from July

Crowds pass below colorful signs in Akihabara, Tokyo, Japan. (Shutterstock/File)

The Japanese government will relax the rule for duty-free shopping from Sunday in its latest effort to spur spending by foreign visitors, after "explosive buying" by Chinese tourists appears to have cooled down.

Under the current rule, foreign visitors have to buy at least 5,000 yen ($45) worth of consumables, such as food and cosmetics, or the same value of general items, such as clothing, to be exempted from paying the nation's 8 percent consumption tax. But some visitors have complained they are not sure if they are buying "consumable" or "general" items.

Beginning in July, foreign visitors' purchases will be eligible for the tax-free program if the total purchased amount of the two categories reaches 5,000 yen.

Many shop operators have said simplifying the rule may encourage foreigners to spend more.

Spending by foreign tourists in Japan hit a record 4.42 trillion yen in 2017 on the back of a rising number of travelers, but there still seems to be a long way to go to achieve the government's goal of raising the amount to 8 trillion yen in 2020.

A decline in "bakugai" explosive shopping by Chinese tourists led average spending per visitor to fall 1.3 percent to 153,921 yen in 2017, according to the Japan Tourism Agency.

Read also: Travelers leaving Japan to pay 1,000-yen 'sayonara tax' from January 2019

Akihiko Tamura, the agency's chief, said at a regular press conference last week that he hopes foreign tourists find the change to the tax-free program more convenient and decide to spend more in Japan.

The latest rule change will also mean less clerical work for tax-free shops in Japan.

The government wants to increase the number of tax-free shops, especially outside of big cities. Tourists can currently enjoy tax-free shopping at about 45,000 shops nationwide, of which 17,000 shops are located outside of the Tokyo, Nagoya and Osaka metropolitan regions.

The government has expanded its tax-free program targeting foreign tourists since October 2014, starting from adding to its list of duty-free items consumables such as food and alcohol, on top of electronic goods, clothing and bags that were already exempt from the consumption tax.

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