Departure tax refund service marks one-year milestone

The nationwide rollout of China's departure tax refund service, which smoothly reached its one-year mark this month, has effectively stimulated inbound travel and increased consumption vitality, experts said.

The policy governing the service aims to further enhance the convenience of departure tax refunds for overseas visitors and optimize their shopping experience. Travelers purchasing tax-refundable items at designated stores across the country can receive a spot refund in renminbi upon signing an agreement and processing a credit card preauthorization.

China's tax authorities and relevant government organs have actively encouraged eligible stores to offer this "buy and get a refund" service, with their total number currently exceeding 8,000, surging more than 100 percent since the policy was adopted in April last year.

As the service continues to expand, more overseas visitors are receiving spot tax refunds on a wider range of goods, further spurring consumption.

According to data from the State Taxation Administration, the number of individuals processing refunds nationwide over the past year increased by 12.96 times. Both the tax-refundable sales volume and the total refund amount increased by 9.35 times over the past year, marking a rapid growth in scale.

Fan Yong, dean of the Central University of Finance and Economics' School of Public Finance and Taxation, said the promotion and implementation of the service have effectively stimulated inbound consumption vitality.

"It stands as an important achievement in China's continuous effort to optimize its business environment, and has promoted local brands on the international stage," Fan added.

To further enhance the business environment, local tax authorities have actively explored ways to upgrade the service over the past year.

For instance, Beijing has introduced a citywide processing system, allowing inbound travelers to shop at any tax refund store in the Chinese capital and process their refunds at a centralized location in the city.

Sichuan province has launched a refund system based on a QR code, enabling overseas visitors to quickly complete the process and receive instant refunds by simply uploading photos of their application forms, valid identification documents and shopping invoices.

Shenzhen in Guangdong province has expanded its diversified electronic refund system by launching a real-time transfer service to WeChat Pay HK wallets for visitors from the Hong Kong Special Administrative Region.

It has also introduced a "digital RMB hard wallet" refund method, which involves a prepaid card that allows travelers to receive and use their refund instantly without needing a bank account or internet connection.

Gary Cai, a partner at professional services firm KPMG and head of KPMG China Economic Research Institute, said that optimizing departure tax refunds and the payment environment lowers transaction costs for overseas visitors.

"This turns potential desire into real consumption," he said, adding that inbound consumption effectively supplements domestic demand and helps optimize the nation's overall trade structure.

Experts also pointed to untapped consumption potential.

While China's inbound consumption in 2025 recovered to the pre-pandemic peak level, accounting for 0.7 percent of the nation's GDP, there remains a gap compared with major global tourist destinations, Cai said.

"Our focus should shift from scale recovery to quality improvement and structural optimization," he said.

To further unleash this potential, Cai suggested implementing higher tax refund rates for premium domestic brands and green, smart products.

Authorities said they will continue to expand service scenarios and provide stronger support for consumption and high-level opening-up.