According to the Board of Audit of Japan, customs officials at Tokyo’s Haneda Airport and Narita International Airport failed to collect approximately ¥339 million ($2.2 million) in consumption taxes from foreign visitors who purchased duty-free items in fiscal 2022. The audit revealed that nine foreign nationals made significant duty-free purchases but were not properly taxed before their departures. This oversight highlights the operational challenges faced by customs officials in notifying travelers of their tax obligations before boarding.
The Board of Audit reviewed ¥64.7 billion worth of duty-free purchases made by foreign visitors in fiscal 2022 and 2023 and found that about ¥3.39 billion in purchases should have been subject to consumption taxes. Under Japanese law, consumption taxes must be collected on duty-free goods if the buyer fails to export the items or does not follow proper export procedures.
The issue of uncollected taxes on duty-free purchases has raised concerns about the potential impact on Japan’s tax revenue. As the country continues to attract millions of foreign visitors each year, the ability to effectively manage duty-free purchases and ensure proper taxation is crucial for maintaining revenue streams.
In response to the findings, the Finance Ministry, which oversees customs operations, has revised its implementation guidelines to improve tax notification procedures. The new guidelines aim to ensure that customs officials can notify travelers in a more efficient and timely manner, reducing the risk of uncollected taxes in the future.
Moving forward, customs officials at Haneda and Narita airports will be required to follow stricter protocols for notifying travelers about their tax obligations. This may include earlier notification times, improved documentation processes, and enhanced communication with travelers regarding the export requirements for duty-free items.
By implementing these changes, Japan aims to reduce the number of uncollected taxes and maintain a fair and transparent tax system for all travelers, ensuring that foreign visitors adhere to the country’s tax regulations while enjoying their shopping experiences.