Japan may exempt foreign tourists from liquor tax

As part of the effort to boost regional economies, the Japan Tourism Agency plans to seek an exemption for domestically produced alcoholic drinks such as sake from the liquor tax when purchased by foreign tourists, agency officials said Saturday.

The agency will call for the exemption when the Finance Ministry begins receiving annual requests from government offices for tax changes in the next fiscal year starting in April, according to the officials.

The measure is intended make made-in-Japan sake, shochu (distilled spirits), wine, beer and whisky more attractive to overseas visitors due to the lower rates and thus grow demand for such products amid recent lackluster sales.

Subject to the liquor tax exemption will be alcoholic drinks sold at the production sites designated by local tax offices as shops that can sell their products without applying the consumption tax.

Purchasers will be able to take possession of what they have bought on the spot. But just as under the consumption tax-free shopping system for foreign visitors, they will not be allowed to transfer or consume their purchases while in Japan.

The liquor tax varies based on liquor types and alcohol percentages. The tax on a 720-milliliter bottle of sake is ¥86.4, that on a 750-ml bottle of wine ¥60 and that on a 350-ml can of beer ¥77.

In October 2014, the Japanese government expanded its list of duty-free items for foreign travelers to include foods, alcohol, drugs and cosmetics on top of electronic goods, clothing and bags already exempt from the consumption tax.

As a result, sales of foods and cosmetics have grown. Japan saw a record 19.74 million foreign visitors for all of 2015.

“If the number of foreign tourists who buy sake rises and raises the profile of Japanese sake culture, it is expected that exports will expand and foreign visitors will grow,” an agency official said.