China widens tax rebates for foreign tourists to boost spending

CHINA said it will lower the tax rebate threshold for foreigners visiting the country, in an effort to boost consumption as Beijing attempts to offset some of the damage of the trade war.

Tourists who spend at least 200 yuan (S$36) on the same day at the same store will be eligible for the rebate, according to a joint statement from the Ministry of Finance, the People’s Bank of China and other government departments. The maximum rebate amount for cash claims will be increased to 20,000 yuan, it added. 

The government will also expand the list of eligible tax-refund stores and streamline procedures to make it easier for tourists to claim the rebate, according to the statement.

China is increasingly attempting to encourage more spending as it attempts to soften the damage of a series of tit-for-tat trade restrictions with the US. At a closely watched government meeting last year, Beijing said boosting consumption and stimulating domestic demand was its top priority.

Spending by foreign tourists accounted for around 0.5 per cent of China’s gross domestic product last year, a lower ratio than seen in many major economies, said Sheng Qiuping, a vice-minister at the Ministry of Commerce, during a briefing in Beijing on Sunday.