Global Times - Tourists in Hainan to skip tax

Home >> Autos >> Auto China

Tourists in Hainan to skip tax

Source: Global Times
[08:21 November 09 2009]
Comments

By Tu Lei

Mainland residents making purchases in Hainan Province will receive a tax refund covering the cost of the items upon leaving the island province, thanks to a new policy boosting tourism.

According to policies expected to come out later this month, travelers in Haikou, Sanya, Boao and Wanning in Hainan Province will get the refunds upon departure, according to a Saturday report from the China Business Newspaper.

Most inland travelers to Hainan are able and ready to spend, so it is necessary to get rid of taxes and promote buying, said Tang Jianwei, analyst from Haitong Securities.

Tang also predicted that 1.9 billion yuan ($278.28 million) worth of goods would be purchased under the new policy.

As early as September, Zhang Jianhua, president of China International Travel Service (CITS), said the proposal, which was submitted by China Duty Free Group (CDF), had been approved in principle.

CDF is attached to CITS, the only company authorized by the State Council to run duty-free businesses.

In September of this year, CDF opened its first duty free shop in Sanya, and the company plans to open more in the near future.

Although Hainan is aiming to be an island bringing in international tourism, Chinese travelers still make up the majority of visitors.

In the first three quarters of the year, there were 15.72 million travelers, with 11.7 million from the mainland.

Tourists visiting Hainan have not yet maxed out their potential.

According to Reuters, consumer spending accounts for only 12 percent of the tourism income of the island province, compared with 21 percent domestic and 31 percent international averages.

But not everyone is optimistic about Hainan's potential.

Xiao Qianhui, general manager of Shanghai Spring International Travel Service, said that he does not expect a major boost because "tourists have many options for shopping outside of Hainan."

An insider who spoke on condition of anonymity said it will still take time for Hainan to attract buyers. Hong Kong, the source noted, spent several years building up its shopping environment before it became the bustling haven of consumption as it is today.