Japan Considers Introducing Accommodation Tax Amid Surge in Tourists: Chiba Prefecture Approves 150 Yen Levy

The number of foreign tourists who visited Japan in the first half of 2024 (January to June) reached 17,777,200, according to statistics. This figure surpasses the previous record high in the first half of 2019 by over 1 million. The number of visitors in June alone was 3,135,600, representing a 51.2% increase compared to the same month the previous year. This surge in inbound demand has prompted local governments across Japan to consider introducing or increasing accommodation taxes.

Accommodation taxes are taxes that local governments can newly establish for specific purposes, such as promoting tourism, outside of legally mandated taxes. They are levied based on the number of overnight stays per person. Nine local governments, including Tokyo, Osaka Prefecture, Kyoto City, Kanazawa City, and Fukuoka Prefecture, have already implemented accommodation taxes. Additionally, over 30 other local governments, including Hokkaido, Niseko-cho in Hokkaido, and Atami City in Shizuoka Prefecture, have either decided to introduce or are considering introducing accommodation taxes.

Chiba Prefecture is one such example. Governor Toshi Kumagai stated that it is 'financially unavoidable' and initiated a study group on accommodation tax introduction last October. In July of this year, the third expert meeting tentatively approved a flat accommodation tax of 150 yen.

Ritsujin Hito, the head of Chiba Prefecture's Tourism Policy Division, explained that they anticipate needing 4.5 billion yen for new tourism promotion initiatives. Based on the approximate 28 million overnight stays in the prefecture last year, a 150 yen burden per person is expected to generate approximately 4.2 billion yen in tax revenue, covering a significant portion of the target amount. He also added that 'Narita Airport expansion will undoubtedly lead to an increase in inbound tourists, and the extension of the Ken-o Expressway necessitates preparedness to accommodate tourists in the Boso Peninsula. It will be used as a funding source for the efforts of municipalities.'

Along with introducing the accommodation tax, Chiba Prefecture conducted surveys targeting accommodation businesses, municipalities, and travel agencies. The results showed that the majority (56.3%) of respondents favored collecting the tax from all accommodation guests without exception. In response to the question, 'What impact is expected if Chiba Prefecture charges accommodation guests a few hundred yen in accommodation tax?', 52.1% responded 'no impact', while 11.3% believed that 'it would decrease the number of tourists to Chiba Prefecture.' Within Chiba Prefecture, Urayasu City and Minamiboso City have also started examining the possibility of implementing an accommodation tax, in addition to the prefectural tax.

Ritsujin Hito, the head of the Tourism Policy Division, explained, 'If municipalities introduce accommodation taxes, they will be added to the prefectural tax of 150 yen, but close coordination with municipalities regarding the timing of introduction and other aspects is necessary.' This may lead to variations in how municipalities handle the tax. For example, Fukuoka Prefecture, which introduced a 200 yen accommodation tax in 2020, has different implementation methods. The Fukuoka Prefecture General Affairs Department's Tax Division explained that 'Kitakyushu City levies 200 yen, while Fukuoka City levies 200 yen for accommodation fees under 20,000 yen and 500 yen for those 20,000 yen and above per person. However, both cities are designated cities, so they pay 50 yen of that amount to the prefecture.'

Local governments, including Tokyo, are also considering raising the accommodation tax.