Japan plans 10,000 new ‘tax free’ shops

By Doug Newhouse |

The Japanese Government has announced that new legislation this October could permit up to 10,000 new ‘tax-free’ shops to open in the country.


Prime Minister Shinzo Abe announced the planned rule change at a meeting yesterday to widen the range of goods available for tax free purchasing from fashion and electrical goods, to include other product categories, such as cosmetics, beauty products, liquor and food items from October.


The Japanese Prime Minister’s office announced the measure as part of the national campaign to boost the number of overseas visitors to 20m and provide a much-needed stimulus to the economy in terms of foreign earnings. More than 10m visitors came to Japan last year, taking advantage of the weak yen.


This campaign will include the promotion of tourism to Japan from its cities to the countryside, with special packages to be created for backpackers, as well as those visitors looking for more luxurious vacations. A more relaxed approach will be taken towards visa applications for certain nationalities – particularly in south-east Asia – and the Japanese government says this is in line with Japan’s lead up to the 2020 Olympic Games.


Speaking at yesterday’s fourth meeting of the Ministerial Council on the Promotion of Japan as a Tourism-Oriented Country at the Prime Minister’s Office, Prime Minister Shinzo Abe said: “Last year the annual number of foreign tourists visiting Japan exceeded 10 million for the first time ever. However, we must not grow complacent over those figures as we work toward becoming a tourism-oriented country.


“Today I have approved the draft of the new Action Program, which sets out the ambitious target of reaching 20 million overseas visitors by 2020, using the 2020 Tokyo Olympic and Paralympic Games as momentum.


“As part of this, we will, for example, offer visa exemptions for Indonesian visitors. We will also further relax visa requirements for visitors from the Philippines and Vietnam. Additionally, in October this year, we will broaden the scope of consumption tax exemptions for foreign visitors to Japan to include all products. In line with this, we will double the number of tax-free shops in Japan to roughly 10,000 by 2020.”



Prime Minister Shinzo Abe and his Cabinet face the press at yesterday’s meeting of the ‘Ministerial Council on the Promotion of Japan as a Tourism-Oriented Country.


This new plan follows serious past attempts to lobby the government to allow the introduction of ‘duty free’ arrival and downtown pre-order departure shopping, with obvious huge potential implications for the global industry.


In this separate initiative, TRBusiness revealed that the Japanese Finance Ministry launched an arrival and downtown shop study back in the summer of 2012 as part of a wider government taxation reform review aimed at identifying changes to help boost Japan’s future economic development.


At that time, major Japanese airports wrote to the government requesting changes be made to Customs Department regulations to permit the introduction of arrival shopping [for more details click here: http://www.trbusiness.com/index.php/regional/asia/11965-japan-formally-considers-arrivals-shops.html].


Leading airport operators who backed these arrival shop proposals at the time included the biggest – Narita International Airport Corporation, Kansai International Airport Corporation and Chubu International Airport Corporation. All requested changes in the Customs Department’s rules to allow departing passengers to purchase duty free goods for collection at arrival hall collection points.



Having said that, these Japanese airports were not in favour of downtown duty free shopping or the opening of pre-order collection points in their airports, fearing that pre-order downtown shopping might divert a share of their sales.


The downtown duty free issue also surfaced again last August and this was also based on the 2012 Finance Ministry Study. At the time, very senior Japanese industry sources told TRBusiness that this was being considered as part of the government’s commitment to breathe new life into its inbound tourism numbers.


TRBusiness covered this story on August 1 2013 [click here for full background. http://www.trbusiness.com/index.php/regional/asia/13604-japan-considers-df-downtown-store.html].


Just over 11.25m foreign arrivals visited Japan setting a new record in 2013 – up by 22.7%. South Koreans accounted for around 2.31m (+21.2%); Taiwanese 2.16m (+51%); and China visitors 983,270 (-6.4%). The decline in Japan’s third largest inbound market was due to its ongoing territorial waters dispute with China.


TOP IMAGE: Prime Minister Shinzo Abe addressing yesterday’s meeting of the ‘Ministerial Council on the Promotion of Japan as a Tourism-Oriented Country ‘ in Tokyo.


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