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All travelers leaving Japan will now pay a 'sayonara tax'

Aarthi Swaminathan
Finance Writer

Starting Monday, January 7, visitors to Japan will have to pay a 1,000 yen (about $9) levy when leaving.

The departure tax — dubbed a “sayonara tax” — applies to both international and Japanese travelers who travel via plane or ship, excluding children under 2 years old and those in Japan for fewer than 24 hours.

View of famous Torii (gate) of Itsukushima Shrine which stands offshore at Miyajima Island in Hiroshima Prefecture, Japan. (Photo: Getty)

The Japan tourist tax is being implemented in anticipation of the surge in visitors expected in 2020 for the Tokyo Olympics.

“Japan wanted money to pay for technology terminals to process visitors quicker and to add improved international language signage throughout the country,” World Travel & Tourism Council Research Director Rochelle Turner told Yahoo Finance.

The money is also expected to go towards installing cashless payment terminals for public transportation.

The Japanese parliament passed the legislation last April and is expecting an increase of 6 billion Yen (about $55.4 million) in revenue in fiscal 2018 through March 2019, and 50 billion ($461.6 billion) Yen in fiscal 2019.

A woman takes a pictures of a mannequin wearing a rabbit mask in the Harajuku district of Tokyo, which is popular among tourists, in Japan, March 30, 2016. The Japan tourist tax will add an extra element to each trip. (Photo: REUTERS/Thomas Peter)

Japan tourist tax comes amid surge in tourism

While travel and tourism contribute to less than 7% of Japan’s GDP, the Tokyo government considers tourism a driver of economic growth given the recent surge in arrivals.

Japan saw a boost in tourism between 2014 and 2015 as seen in the graph below, and arrivals topped 30 million for the first time in 2018

Tourism arrivals in Japan.

The government has also “made strides in opening up the country with facilitated visa policies,” Turner noted. The efforts have paid off, she added, because “international visitors do provide considerable export earnings for the country, bringing in U.S. $35.3 billion in 2017,” and that number is growing at a rate of over 4% per year.

Chinese tourists account for the largest number of foreign tourists to Japan, followed by South Korea and Taiwan. Although American visitors only comprised 4.8% in 2017, the number has been steadily increasing. Between January to November last year alone, almost 1.4 million Americans visited the country.

American tourist arrivals in Japan.

Departure tax in other countries

Japan isn’t the first country to impose a departure tax levy.

Countries including Australia, Cambodia, and the Philippines also charge departure fees that either include the tax as part of the airfare or require passengers to pay in cash at the port of departure.

The tax is common around the world, said Turner, and since its incorporated into a travel ticket, many visitors may be unaware of them.

And as tourism and travel expands and becomes a bigger part of a country’s economy, “naturally it should contribute to its fair share of taxation and support public sector spending on services and the infrastructure that enables the sector to thrive,” said Turner.

Ultimately, the Japan tourist tax isn’t likely to seriously impact travel plans, according to Turner.

“For most U.S. visitors, Japan is a long-haul destination and is already known for not being a cheap place to visit.”

Aarthi is a writer for Yahoo Finance. Follow her on Twitter @aarthiswami.

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