Local governments across Japan consider accommodation tax to support tourism development

A total of 42 Japanese municipalities have either introduced or plan to introduce such levies to fund tourism infrastructure, amidst a surge in inbound travel.

Amidst booming inbound tourism, 92 municipal governments across Japan are considering the introduction of lodging taxes at hotels and traditional Japanese ryokan inns, according to a recent survey conducted by Kyodo News.

The survey, carried out between June and July, gathered responses from 1,723 local governments, representing a 96% response rate. It revealed that 42 municipalities have either already introduced or plan to introduce lodging taxes.

Of the 35 governments that have already obtained approval from the Minister of Internal Affairs and Communications, 12 had enacted the tax by the end of July, while the remaining 23 aim to do so by 2026.

Most municipalities that have already introduced or are planning to introduce the tax have set the tax rate at approximately ¥200 per person per night, while some charge/plan to charge ¥1,000 or more for expensive accommodation facilities.

The survey also found that 728 municipalities “are interested” in introducing lodging taxes, while 506 said that they are not interested in doing so.

Another 60 had explored the idea but ultimately decided not to do so, and 296 answered with “other”, citing reasons such as the absence of taxable accommodation facilities in their jurisdictions.

As for the intended use of the tax revenue, 434 governments cited general tourism promotion, 242 pointed to the preservation of historical landscapes and natural environments, and 228 aimed to improve infrastructure for foreign visitors.

However, concerns remain among some local governments regarding transparency in how the revenue will be used, as well as the administrative burden the tax may place on small-scale accommodation providers.