Japan mulls removing tax-free limit on consumable goods purchases

     TOKYO, Aug. 27 Kyodo - The Japan Tourism Agency said Tuesday it is considering removing a 500,000 yen ($3,500) tax-free limit for purchases of consumable goods such as cosmetics, alcohol, food and medicine, as it seeks to boost spending by inbound travelers.

    As part of its tax reform requests for fiscal 2025, the agency also called for scrapping a requirement that tax-free items be packed and sealed in bags, a rule put in place to prevent consumption or reselling of the items before leaving Japan.

    The issue is instead expected to be addressed by shifting to a system where tax is refunded after travelers are confirmed to have the items upon departure from Japan. Details will be finalized in tax reform plans for fiscal 2025.

    Meanwhile, a 1,000-yen departure tax imposed on each traveler leaving the country regardless of nationality is expected to reach a record high of 47 billion yen in fiscal 2025.

    In Japan, foreign tourists are exempted from paying consumption tax when purchasing goods totaling 5,000 yen or more as long as they intend to use the items in their home countries.

    The agency considers the current daily limit on consumable goods of 500,000 yen per store too low to cater to the demand for high-end alcohol and cosmetics. No such limit exists for durable items like electronics and clothing.

    The packed and seal requirement for tax-free goods has not been well received by some foreign tourists amid environmental considerations over excessive plastic use, the agency said, adding that scrapping the rule would also reduce the burden on stores.

==Kyodo