Lawmakers in Japan have their eyes on the country’s tax-free shopping perks and are threatening to scrap the system.
A political group intent on making the change said that widespread fraudulent use of the tax-free system undermined “the credibility and fairness of the consumption tax”.
One lawmaker remarked, “The weak yen, compounded by decades of deflation and stable prices, has made Japan such a popular destination for tourists that, even if they didn’t enjoy tax-free shopping, they would come anyway.
”The tax-free system has led to some results in the past,” he said. “But I think that now, its role has come to an end.”
Japan introduced tax-free shopping 70 years ago. The current system exempts foreign visitors from paying the nation’s 10% consumption tax on purchases exceeding ¥5,000 (US$35) – as long as the goods are taken out of the country.
Japan is also expected to add mandatory health insurance requirements in the upcoming fiscal policy review.
Elsewhere, Malaysia is planning to revise its sales tax rate and widen the scope of its services tax from 1 July.
A sales tax rate of 5% to 10% will be imposed on non-essential and luxury goods, the ministry.
The services tax will be expanded to include property rentals or leasing.
AloJapan.com