Japan boosts tax-free shopping for tourists

Japan boosts tax-free shopping for tourists

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Tourists to Japan will get to enjoy tax-free shopping October onwards.

In a bid to encourage tourist spending in the country, Japan is expanding the list of tax-free shopping options, starting October 1, 2014.

According to the Japan Shopping Tourism Organization, shopping items such as confectionery, cosmetics, health products, alcohol and even batteries have been added to the country’s tax-free list and will be available at designated tax-free shops. Japan had a total of 10.3 million international tourists in 2013 and is expecting the inflow to be much more with this move.

Japan tax-free shopping

As per the Japan Tourism Agency (JTA), foreign tourist purchases account for 30 percent of their total travel expenditure in the country.

However, the authorities are worried that the sales tax might hold purchases back, as it saw a rise of 3 percent in April 2013 and is expected to increase further by next year.

At present, in order for tourists to get a tax exemption, a purchase of more than 10,000 Yen ($96) needs to be made over appliances, branded goods and apparels. There are about 5,700 designated shops selling tax-free products in Japan, most of which are major department and electronics stores, as well as branded goods boutiques in Tokyo and Osaka.

Currently, tourists have to present their passports and fill a tax-exemption form at a special counter at the designated stores with their receipts, in order to get a tax refund. From October 2014 onwards, there will be no need to fill forms and a wider variety of goods will now be available for purchase, absolutely tax-free.

The JTA is in the process of including smaller shops across more regions to double the number of tax-free stores by 2020. Many pharmacies, cosmetic and alcohol stores have already requested for their licenses to be labeled a ‘Tax-free shop’.

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