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Hotels, Restaurants & Leisure

Hotel taxes spread across Japan, as towns tap foreign visitors

Coastal and ski resort areas use revenue for infrastructure and tourism

Ski resort towns in Japan's Hokkaido Prefecture are among those considering a hotel accommodation tax.

TOKYO -- More Japanese municipalities look to introduce a tax on visitor stays at hotels and traditional ryokan inns, seeking to tap the growing number of foreign tourists.

These accommodation taxes first appeared in large metropolitan areas. Tokyo adopted one in 2002, followed by Osaka Prefecture in 2017 and the city of Kyoto last year. Kyoto anticipates annual revenue of 4.5 billion yen ($42.7 million) from the tax, which typically is used for purposes such as building tourism infrastructure and providing information to visitors.

Four local governments now have accommodation taxes in place, while three others have passed measures allowing such a move. The city of Nara launched a panel to discuss the matter in July, while Kitakyushu in southern Japan said last month that it will proceed with a tax. Roughly 20 municipalities are considering doing so, a survey by Nikkei found.

The town of Kutchan in Japan's northernmost prefecture of Hokkaido will collect a 2% lodging fee starting in November, the first fixed-percentage accommodation tax in Japan. The snow resort town receives nearly 1.3 million visitors a year who stay at least one night, of which one-third are foreigners. Kutchan projects annual revenue of about 300 million yen, which it plans to use for building transportation networks and protecting the environment.

The neighboring town of Niseko aims to introduce an accommodation tax in 2021, and Sapporo -- the largest city in Hokkaido -- has begun studying the matter.

The prefecture of Hokkaido is considering its own accommodation tax. Though nothing prevents both a prefecture and a municipality from levying taxes, the prospect of double taxation could drive tourists away.

The city and prefecture of Fukuoka in southern Japan clashed over that issue. The prefecture began considering the matter first, but the city assembly passed an ordinance that included the introduction of an accommodation tax. After some twists and turns, the two sides reached an agreement in May on the distribution of tax revenue.

Tourism-related businesses have complained about the tax. Kanazawa, a city on the Sea of Japan coast, in April began collecting a 200-yen tax when the lodging fee is less than 20,000 yen per person per night, and 500 yen on stays above that threshold.

"It's unfair that the tax is the same for hotels less than 20,000 yen and for guest houses, which are mostly around 3,000 yen," said the owner of a guest house.

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