Overseas tourists visiting Beijing and Shanghai will be able to obtain tax refunds on their purchases as of Wednesday, the two local governments announced on Tuesday, a move which is aimed at boosting tourism.
Foreign tourists and those from Hong Kong, Macao and Taiwan who have stayed in the Chinese mainland for no more than 183 consecutive days can receive a rebate of 11 percent on goods purchased at designated department stores.
The minimum purchase for a value-added tax refund is 500 yuan ($80) in any one store in a day. The refund is valid when the purchase is made within 90 days before departure and the products remain unused upon departure.
Beijing and Shanghai designated 86 and 27 stores, respectively, with most located in tourist spots and business hubs where a wide range of overseas tourists' favorite items, including silk and tea, are sold, officials told reporters on Tuesday.
"The main purpose of the initiative is to attract more foreign visitors and boost their purchases in China," Liu Simin, deputy secretary-general of the Beijing Tourism Society, told the Global Times, adding that tax refund policies are "standard" in a metropolis.
The number of foreign tourists to China has been dropping on a quarterly basis since 2012, according to the Workers' Daily. Only 5.61 million foreign tourists visited China in the first quarter of 2015, down 3.9 percent compared with the same period last year and the income brought by inbound trips slid by 0.4 percent.
China started a pilot tax refund program in Hainan Province in 2011, requiring a minimum purchase of 800 yuan. The program covered only 324 items, but now have been applied to all items except those prohibited by law from being taken overseas.
"However, more lenient tax rebate policies do not necessarily lead to more tourists," warned Liu.
The drop of inbound trips can be attributed to the high yuan exchange rate compared with China's neighboring countries such as Japan and South Korea, he explained, in addition to smog and occasional terrorist attacks.
"As long as the major problems remain unsolved, the tax rebate initiative may achieve limited success," he said.
