China is relaxing tax refund rules for foreign visitors effective immediately in bid to attract more tourist revenues. The new policy is part of wider efforts to boost spending inside the country as it seeks to counter the impact of the trade war with the U.S. International visitors will now be able to claim refunds on purchases over CNY200, compared with the previous limit of CNY500. The limit on the cash refunds they can claim will also rise from CNY10,000 to CNY20,000, with no limits on those done by bank transfer. The authorities will also increase the number of duty-free shops catering for foreign visitors, the Ministry of Commerce and five other departments announced. The new policy follows moves last year to ease visa restrictions to attract more foreign visitors.
“Departure tax refunds help reduce shopping costs for overseas tourists and are an important way to attract and expand inbound consumption,” Vice Minister of Commerce Sheng Qiuping said. He added that the new policies were designed to overcome a series of problems such as the small number of places where visitors can claim tax refunds, a process that makes it difficult to apply for them, limited shopping options, and the lack of domestic products on sale to visitors. The authorities will allow more tax refund outlets in high-traffic areas such as commercial districts, tourist attractions and airports, while loosening registration conditions and filing processes. Products on offer in duty-free stores will be diversified by allowing a range of retailers – including international and Chinese brands, heritage products and cultural and other speciality shops – to join the duty-free network.
Despite a surge in revenue from foreign tourism last year, it accounted for just 0.5% of China’s gross domestic product (GDP), compared with 1% to 3% in developed countries. In his government work report last month, Premier Li Qiang had listed “improving duty-free shop policies and promoting inbound consumption” as a key measure to stimulate consumption inside China, the South China Morning Post reports.
