Japan to revamp tax break program for foreign visitors

December 6, 2017

Tokyo- Senior members of the tax panel of Japan's ruling Liberal Democratic Party agreed on Wednesday to overhaul the current consumption tax exemption program for foreign visitors, in order to encourage them to boost expenditures in the country.

Foreigners are now allowed to use the tax break program only if their purchases in each of two categories--"general goods" such as electric appliances and "consumable goods" like food and cosmetics--total 5,000 yen or more.

Under the revised program, the 8 pct consumption tax would be exempted if any purchases by visitors from abroad reach 5,000 yen, regardless of the product categories, according to the plan agreed at a meeting of the executives of the Research Commission on the Tax System.

The meeting was held for discussions on tax reform requests from government agencies.

The revamped consumption tax relief program will be included in the LDP-Komeito ruling bloc's fiscal 2018 tax reform package, to be drawn up on Dec. 14.

The Ministry of Land, Infrastructure, Transport and Tourism asked for the scrapping of the product categories as part of its requests submitted to the LDP in August based on opinions from foreign visitors that the current system is complicated.

The tax panel members also agreed on support for company-led child care facilities used mainly by their employees, in line with the government's efforts to reduce the number of children on nursery waiting lists.

Specifically, an existing program that allows companies to book costs to introduce play equipment and security systems at their nurseries as tax-free losses will be enhanced to help them reduce their corporate tax payments. Jiji Press