The government and ruling parties plan to exempt foreign tourists from paying liquor taxes on sake and wine purchased at breweries designated as tax-free shops, as part of tax system revisions for fiscal 2017.
They also aim to extend the reduction of the aircraft fuel tax until the end of fiscal 2019.
To help municipal governments and local businesses in regional areas woo more foreign tourists, foreigners will be exempted from liquor taxes on products sold in sake breweries and wineries. This will result in lower-priced drinks available for purchase.
The lower aircraft fuel tax, which airline companies pay for operations on their domestic routes, will be maintained so that air routes to regional destinations in the country will be more appealing to travellers.
The number of foreign tourists to Japan topped 20 million this year for the first time, doubling over the past three years.
The government has set a goal of increasing the number to 40 million by 2020.
The key to achieving this target is to not only promote popular destinations in large cities, but also enable tourists to go sightseeing more easily in remote regions.
Currently, foreign tourists who buy alcoholic beverages in tax-free shops are exempt from paying consumption tax. However, they do have to pay liquor tax, which is ¥42 (S$0.50) per 350 milliliters for sake and ¥28 per 350 milliliters for wine.
From fiscal 2017, they will also be exempt from paying liquor tax at sake breweries, wineries, distilleries producing shochu spirits, and factories of locally brewed beer.
