Tourism Tokyo set to introduce uncapped 3% hotel tax

[thomas]

The Tokyo Metropolitan Government was considering a uniform 3 per cent accommodation tax on hotel stays. Officials were said to be looking to move away from the current fixed-amount system so that higher-priced rooms, including those in foreign-owned hotels, would generate more tax revenue. The threshold for exempting low-cost stays was also expected to be revised under the plan.

The amended ordinance is expected to be submitted to the Tokyo Metropolitan Assembly in February, following a public comment period. If approved by the Ministry of Internal Affairs and Communications, the changes will take effect in fiscal 2027. If the new framework is implemented, accommodation tax revenue -- now estimated at 6.9 billion yen ($44.2 million) -- is expected to double. No cap will be set on the hotel tax amount. Given the growing number of foreign-owned hotels and luxury resort hotels in Tokyo, lawmakers have decided that guests who can afford to stay there should bear a proportionate share of the burden.

The proposal also includes raising the maximum exemption amount from 10,000 yen per night to 15,000 yen. These exemptions are meant to lessen the burden on those travelling for school or business trips. At the same time, other forms of accommodation previously exempt will become subject to the tax, including private rentals and hostels. This is meant to ensure that the fairness of the tax system extends to options like luxury vacation rentals. Tokyo was the first area in Japan to implement this type of hotel tax in 2002. The current system is tiered, charging 100 yen for stays costing at least 10,000 yen but less than 15,000 yen per night, and 200 yen for stays costing 15,000 yen or more per night.

Paywall alert:

Tokyo hotel tax poised to be set at 3% with no cap

New framework would bring more revenue from luxury, foreign-owned accommodations

asia.nikkei.com