Japan to scrap tax-free purchase limits as new refund system takes effect

Japan is set to overhaul its tax-free shopping system for foreign visitors starting November 1, as reported by the Qatar Tribune Business. The new system will require travelers to pay consumption tax upfront on purchases and claim refunds upon departure, aiming to curb abuse of the tax-free system by reselling goods before leaving the country.

Currently, foreign visitors can purchase goods tax-free at stores, but under the new refund system, they will scan their passports at dedicated terminals at airports and ports to receive refunds in cash or on their credit cards upon departure. Major airports will also offer smartphone-based procedures to help ease congestion. The daily purchase limit of 500,000 yen on consumables such as alcohol and cosmetics will be eliminated, and special packaging designed to prevent resale will no longer be required.

However, some retailers express concern that the change could discourage shoppers from making additional purchases with the money they save on taxes.

Brief written by urgent.news from Qatar Tribune Business's own syndicated text. Machine-written — may contain errors; check the original before relying on it.