Japan considers higher taxes on foreign visitors to boost government revenue

Japan is considering raising the tax burden on foreign visitors by eliminating duty-free shopping and increasing departure levies, as lawmakers seek ways to bolster government finances without alienating voters.

According to Nikkei Asia, both the ruling and opposition parties are scrambling to propose measures that would ease the financial burden on households ahead of the upper house election next month. 

In a bid to avoid introducing new expenses for voters, increasing taxes on foreign visitors has become a less contentious option.

Yuumi Yoshikawa, a lawmaker from the ruling Liberal Democratic Party (LDP), suggested that the international tourist tax, which is paid on departure from Japan, should be raised. 

She argued that this tax should be increased to align with the levels seen in other countries, a sentiment supported by Prime Minister Shigeru Ishiba, who indicated he would consider exploring the idea.Japan’s departure tax, introduced in 2019 to generate a stable revenue stream for expanding and enhancing tourism infrastructure, is currently set at 1,000 yen, or roughly 266 baht, per person. The Finance Ministry announced on June 2 that revenue from the tax for fiscal 2024 has reached a record high of 48.1 billion yen (approximately 10 billion baht).

At present, the departure tax is an additional charge on airfares and applies to both Japanese nationals and foreign visitors. If the tax were to be increased solely for foreign tourists, a new system would be required.

Another proposal under consideration is to revise or eliminate the consumption tax exemption that allows duty-free purchases for foreign visitors.



Taro Aso, a former prime minister and senior adviser to the LDP, presented a proposal in late May advocating for the abolition of the exemption.

According to the proposal, the large-scale purchases of home appliances and medicines by some foreign tourists are not in line with Japan’s vision of a tourism-oriented country. 

It argued that these purchases do not contribute to revitalising local economies or creating jobs and are often made with the intent of reselling, primarily in major urban areas.The Japanese government has already suggested measures to prevent such activities, including a planned shift in November 2026 to a system where tax refunds will be issued at the time of departure, with confirmation that the items are being taken out of the country.

However, some cautionary voices have emerged in response to these proposals. 

Japan has set an ambitious target of 60 million foreign visitors by 2030, a more than 70% increase compared to 2024. A tax burden that is perceived as too high could discourage travellers, resulting in a reduction in spending by visitors and negatively impacting industries such as retail.

"People might panic if foreigners stop coming," said another senior member of the LDP's tax commission, "We just changed the duty-free system, so we can't change it again so soon."

Following the UK’s decision to abolish tax exemptions for foreign tourists post-Brexit in 2020, luxury brand stores and other establishments reported a decline in sales, attributed to the policy change.

Some municipalities in Japan are already moving to increase taxes for foreign tourists. 

Osaka prefecture plans to raise its accommodation tax by up to 200 yen from September, and extend its coverage to include accommodations costing at least 5,000 yen per night, down from the current threshold of 7,000 yen. 

Meanwhile, Kyoto city has decided to increase the upper limit of its accommodation tax per person per night from 1,000 yen to 10,000 yen, with the change expected to take effect after March 2026.

(2025/06/10-00:00)