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Tax-free shopping to go paperless in Japan

Stapling receipts to passports will become a thing of the past

Proofs of purchase for tax-free goods can make passports bulky. (Photo courtesy of Japan Tax-Free Shop Association)

TOKYO -- With the 2020 Tokyo Olympics in sight, the Japanese government aims to simplify tax-free shopping by digitizing the paperwork.

Foreign tourists who seek exemption from Japan's consumption tax currently need proofs of purchase stapled or glued to their passports to show customs when leaving. This not only makes the passports bulkier, but also raises the possibility of damaging the passports when detaching what can amount to many sheets of paper. 

The Ministry of Finance and the National Tax Agency will work together on the digitization initiative, which will include installing special terminals at customs. They hope to go digital in April 2020 in time for the Olympics and the expected influx of tourists.

Funding for the project, such as expenses to develop the necessary systems and install the terminals, will likely be included in the fiscal 2019 budget.

Retailers that sell tax-free goods will digitize passport and other information, such as date of purchase, and provide it to the National Tax Agency. The terminals at customs will match the data to items that travelers are taking home.

The government hopes that the terminals will also help detect fraud by travelers who resell tax-free goods before leaving Japan, for example.

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