In 2026, Japan will change how it processes tax-free sales for tourists who shop in the country. However, several voices across the political spectrum here say that the country should change the system again – by getting rid of it altogether.
Lawmaker: “Foreigners with leeway” shouldn’t get away tax-free
Currently, foreigners who show a passport when shopping at many stores in Japan can skirt the country’s consumption tax, which is 10%. (It’s 8% for food consumed in a restaurant.) Each store must conduct this procedure at point of sale.
In November 2026, the system will move to a refund basis. That means shoppers will need to retain their receipts and request a refund at automated kiosks at their port of departure. The move is intended to crack down on resellers who are abusing the tax-free system to scalp goods online.
However, according to Tokyo Shimbun, some politicians are feeling the pressure to do something – anything – to relieve Japanese citizens’ financial distress as the cost of nearly everything continues to increase. Some are setting their sights on taxing tourists as a solution.
“Instead of squeezing more from citizens, we should be asking foreigners who have the leeway to pay the taxes they should have paid anyway,” the Constitutional Democratic Party’s Ōishi Kensuke said in a House of Representatives session aimed at revising tax law.
The CDP is a left-leaning party in Japan that has generally championed a lower tax burden for working-class Japanese citizens. Ōishi argued that the weak yen gives inbound tourists a lot more leeway than working-class Japanese people currently have.
Agreement from other parties
Ōishi isn’t the only voice saying this. On his YouTube channel, Democratic Party For The People (DPFP) leader Tamaki Yuichirō championed the move, saying it’s needed both to address overtourism and enrich the Japanese people.
Meanwhile, further right, the Liberal Democratic Party’s Nakanishi Kenji has been championing the move for the past several months, insisting there “are many people across the political spectrum” who support eliminating the tax-free system. He received applause from both the ruling LDP party as well as opposing party members when he called to advance debate on the issue.
If it became a reality, the government’s Ministry of Finance said the move could add 160 billion yen, or around $1.1 billion, to Japan’s coffers yearly. That number would grow as tourism to the country approaches 40 million people a year. Some experts say it could help address a growing feeling among Japanese people that the country is prioritizing tourists above its citizens.
Currently, 130 countries around the world levy some form of sales tax, goods and services tax (GST), or value-added tax (VAT). Of those, an estimated 54 countries support tax-free shopping for tourists.
If this campaign becomes law, that could drop to 53.
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