An increasing number of local governments in Japan are moving to delay discussions on whether to introduce an accommodation tax, as the hotel industry has been hit by the spread of the new coronavirus.
The Nara Municipal Government has decided to postpone its proposal for an accommodation tax, while the Miyagi Prefectural Government has withdrawn a draft ordinance introducing such a tax.
Talks on the accommodation taxes are currently stalled due to strong opposition from hotel operators, as they face cancellations due to the outbreak.
The Nara government planned to submit a draft ordinance on the envisaged tax to the municipal assembly’s regular session in March.
But in late January, it announced a delay in the plan after a bus driver living in Nara Prefecture was found to be infected with the virus earlier that month. He was the first Japanese national to be confirmed as infected with the novel coronavirus.
The total value of hotel reservations canceled in the city of Nara has exceeded ¥125 million since then, according to an industry group.
The prefectural government in Miyagi dropped its accommodation tax draft ordinance on March 3, as tourism-related cancellations surged after the prefecture’s first coronavirus case was reported Feb. 29.
“If the coronavirus problem ends in one or two months, I’d call for introducing the tax, but I’m bracing for a very long fight,” said Miyagi Gov. Yoshihiro Murai.
The prefectural government in Okinawa drafted an accommodation tax plan in autumn last year, hoping to introduce it in the fiscal year starting April 2021.
But the Okinawa government refrained from submitting a related draft ordinance to the prefectural assembly’s regular session in February.
The COVID-19 crisis has further decreased momentum to introduce the tax, which had already weakened after a fire at the prefecture’s iconic Shuri Castle last October.
The Fukuoka Prefectural Government as well as the cities of Fukuoka and Kitakyushu have already established accommodation tax ordinances and are planning to introduce the taxes on April 1 as scheduled.
“We’re aware of possible effects from the tax on hotel operators, but we’re making preparations while offering them financial support,” a Fukuoka city official said.
The Tokyo Metropolitan Government became the first authority in Japan to introduce such a tax in 2002.
Similar taxes were later adopted by Osaka Prefecture and the city of Kyoto, as well as Kanazawa, Ishikawa Prefecture. Revenues from the taxes are spent on policy measures related to tourism.