• Kyodo

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The Japan Tourism Agency will propose adding food and cosmetics to the list of duty-free items for foreign travelers as part of its fiscal 2014 reform plan, agency sources said Sunday.

The proposal is aimed at attracting travelers to mitigate the impact of the first stage of the sales tax hike planned for next April.

According to a survey by the agency, food and cosmetics accounted for two of the three most popular types of Japanese souvenirs in 2012, with 58.2 percent of foreigners buying confectionery, 51.4 percent other food products, alcohol and cigarettes, and 38.5 percent buying cosmetics and pharmaceuticals.

Of the ¥1.09 trillion spent by foreign visitors last year, 31 percent was allocated to shopping, the survey said.

The 5 percent sales tax is still levied on food because stores cannot be sure whether the items will be consumed in Japan or taken abroad.

In many parts of the world, including members of the European Union, all products bought by foreign travelers are tax exempt and the refunds are made on departure.

The tourism agency will also propose making the procedure for conducting tax-free purchases easier.

The final decision would be made by the Finance Ministry.