Japan moves to change consumption tax system for tourists

Refund system slated to be introduced in 2026 in bid to curb fraudulent behaviour

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TOKYO - The government and ruling parties intend to change the consumption tax exemption system applicable to tourists visiting Japan to a "refund system" in which they purchase items at prices that include consumption tax, with the tax amount being refunded upon departure from the country.

Coordination for the change has been made among the government and ruling parties. They plan to introduce the refund system as early as fiscal 2026.

The introduction of the new system is because tax is waived at the time of purchase under the current system, and it has been said there is rampant fraudulent behaviour such as the domestic resale of such items afterwards.

Consideration will also be given to improving convenience for visitors to Japan through such means as eliminating the maximum amount of cosmetics, food and other consumable items that are eligible for tax exemption.