Economy

Hainan launches tax rebates to woo tourists

(Xinhua)
Updated: 2011-04-20 16:22

SANYA, Hainan - Hainan, China's southernmost island province, launched a tax rebate program Wednesday as part of its efforts to build the island into a tourist and shopping attraction.

Related readings: Hainan vows to ensure safety during Boao forum  Hainan to let travelers avoid duties  Hainan Island to exempt taxes on imported goods

Starting April 20, both tourists visiting the island and local residents will be able to purchase tax-free commodities from designated shops before flying to other destinations in China.

Before the tax-free pilot store opened at 10:10 am, thousands of shoppers had already lined up outside the shop in Sanya.

Zhu Yan, a tourist from eastern China's Zhejiang Province, is one of the shoppers who swarmed into the store.

Almost all the members of her tour group, except a few elderly tourists, came to the tax-free shop, Zhu said.

"I used to buy tax-free commodities like cosmetics and perfume in Hong Kong. Now I have another choice here in Hainan, which made my trip more exciting," Zhu said.

Taxes eligible for rebates include customs duties, import value added taxes and consumer taxes. When combined, these rebates reduce prices by 10 to 35 percent.

The tax-free shop in Sanya, managed by the China Duty Free Group, has a shopping area of 7,000 square meters and offers 18 types of imported commodities, including jewelry, handicrafts, watches, perfumes and cosmetics.

The trial program sets the rebate cap on commodities worth no more than 5,000 yuan ($765) for each purchase.

Eligible tourists, those 18 years and older, can purchase tax-free commodities twice a year, while island residents can purchase such commodities once a year.

The program is part of the province's plan to build the island into a world-recognized tourist destination, China's Ministry of Finance (MOF) said in a statement released on its website last month.

On March 24, the MOF and other ministries ratified the program modeled on similar schemes on the Republic of Korea's Jeju Island and Okinawa, Japan.

Wednesday's program launch is another step taken by the provincial government to build the island into a more attractive tourist destination for visitors from home and abroad.

The island inaugurated a similar program on January 1 targeted at foreign tourists. Under this program, foreign tourists and citizens from Hong Kong, Macao and Taiwan who have lived in the Chinese mainland for no more than six months are eligible for an 11 percent tax rebate on purchases of 324 items across 21 categories.

The program's launch makes Hainan the fourth island in the world to implement a tax-rebate scheme, said Du Liyin, Director of the Sanya Tourism and Development Commission.

"While offering a better shopping environment for tourists, the program will also boost the development of the island province as an international tourist destination," Du said.