JAPAN. The Japanese government plans to double the number of shops that offer tax free shopping in the country to about 10,000 by 2020, in a bid to capitalise on the influx of foreign tourists during the Olympic and Paralympic Games in Tokyo.
According to reports by Kyodo News International and The Yomiuri Shimbun, the government intends to do this by encouraging shops in rural areas to apply for a government-issued licence.
Tax refunds on purchases are available to foreign tourists only at a number of licensed stores. In Japan tax refunds take place at the point of purchase rather than at a special tax refund counter at the airport.
According to The Yomiuri Shimbun, about 4,600 shops offer this service currently, and they are found at major department stores and electronics stores in the urban areas. The majority of small shops, especially those in the provincial areas, do not offer such a service. Purchases of electronics and fashion goods of over 10,000 Yen are eligible for tax refunds; consumable items such as cosmetics, food, alcohol, cigarettes, medicine, film and batteries are not. Although the tax refund stores are referred to as ‘duty free shops’ they do not operate under the same terms, or offer the same range of goods, as traditional airport duty free stores.
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Duty free shopping in Japan is available at the international airports but tourists can also benefit from tax exemptions at major department and electronics stores in urban areas |
Consumption tax in Japan is a flat 8% (raised from 5% in April), and is scheduled to increase to 10% in October 2015. Exempting visitors from tax on certain purchases aims to stimulate demand.
An action plan on tourism promotion released last year said the government aimed to draw 20 million foreign visitors annually by 2020. The revised action plan will be finalised at a meeting of relevant Cabinet ministers in June.
The Yomiuri Shimbun said the government hopes that these measures will encourage foreign visitors to travel to the rural areas, and that steps will be taken to help local retailers function as tax free shops.
Tax free sales have been rapidly increasing at department stores in the Ginza and Shinjuku districts in Tokyo, The Yomiuri Shimbun noted. At the Ginza Mitsukoshi department store in Chuo Ward, Tokyo, sales from these items accounted for more than 10% of total sales in the month of April.
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How the news of the so-called ‘duty free’ (tax refund) store expansion plan was reported by The Yomiuri Shimbun today |
