China launches tourist tax refund scheme

Overseas visitors can now claim tax refunds on purchases across China, the Ministry of Finance (MOF) announced on Friday, to boost inbound trips and domestic consumption.

According to the plan, foreign tourist and those from China's Hong Kong, Macao and Taiwan who have lived in the Chinese mainland for no more than 183 days -- can receive a rebate of 11 percent on consumer goods purchased at designated department stores.

The minimum purchase for a tax refund is 500 yuan (about 82 U.S. dollars) at any one store in one day.

The rebate covers everything apart from items prohibited from taking overseas in accordance with law.

The refund will be paid in renminbi in cash or transferred to the buyer's bank account.

The State Administration of Taxation and the General Administration of Customs will release detailed measures to regulate the scheme.

China started a pilot tax refund program in south island province of Hainan on Jan.1, 2011. The minimum purchase was 800 yuan and the program covered only 324 items.

"The expansion of the program will spur inbound trips and boost the export of China-made commodities," said Liu Shangxi, a senior researcher with the MOF.

The increasingly well-off Chinese like to spend big on shopping when traveling overseas. But foreign visitors appear to have less appetite for Chinese products.

The National Tourism Administration predicted that some 128 million trips will be made to China in 2015.

"The rebate scheme will encourage shopping, especially for expensive items," said Yang Zhiyong, a finance researcher with the Chinese Academy of Social Sciences.