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Japan considers exempting foreign tourists from liquor tax

Foreign tourists in Japan taste sake at a brewery in Chiba Prefecture.

TOKYO -- Japan's Ministry of Finance is set to exempt foreign visitors from paying taxes on alcoholic beverages bought at sake breweries and wineries as early as fiscal 2017, in an effort to promote tourism outside major cities and spur consumption of Japanese sake and other goods.

The Ministry of Land, Infrastructure, Transport and Tourism has demanded that the finance ministry include the exemption in the tax system revision for fiscal 2017. The Liberal Democratic Party's Research Commission on the Tax System will make a decision on the proposal by the end of the year.

Currently, international visitors are exempt from paying the consumption tax when buying alcohol at designated tax-free shops. However, a liquor tax is still levied. 

If the plan is approved, foreign tourists will be able to buy tax-free alcohol at authorized sake and craft beer breweries and wineries.

For example, 86.4 yen (78 cents) would be exempt for a 720-milliliter bottle of Japanese sake and 60 yen for a 750ml bottle of wine.

The alcohol bought cannot be consumed until tourists leave Japan. Purchase records will be verified when leaving the country to prevent fraudulent acts, such as resale within Japan. 

The popularity of Japanese liquor has been growing overseas. Its export value in 2015 jumped 33% on the year to 39 billion yen, hitting a record high for the fourth consecutive year. 

The finance ministry is also working with the tourism ministry to spur consumption by Japanese returning from abroad. The ministries are considering lifting a ban on the establishment of duty-free shops for incoming travelers at Narita and other international airports, opening the door to exemptions on items such as liquor and cosmetics. 


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