Exciting Tourist Spending | Japan Simplifies Shopping Tax Rules

TOKOYO: Japan relaxed its somewhat convoluted consumption tax rules on July 1, hoping to persuade tourists to be the big spenders they once were. Under previous regulations, visitors would have to spend at least 5,000 yen (US$45) on “consumable” souvenirs, such as food or cosmetics, or the same amount on “general” items, such as clothes, to be exempt from the 8 per cent tax. The two categories could not be combined and confusion abounded as to what was considered consumable and what was general.

Under the new guidelines, overseas shoppers will be eligible for tax-exempt purchases if they spend a total of 5,000 yen on consumable and general products together. The move comes after the country saw a 1.3 per cent decrease in average visitor spending in 2017, according to Japan Tourism Agency, even though the number of international arrivals increased. The downturn has been attributed to a decline in bakugai – excessive spending by Chinese tourists. And the new rule is not just good news for shoppers, Japanese newspaper the Mainichi Shimbun reported last month that it will also mean less paperwork for those who work in tax-free shops.

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