Departure tax revenue diverted to bear, sakura pest control

Proceeds from Japan’s departure tax, tripled this summer to fund overtourism measures, are being funneled to projects including bear countermeasures and sakura pest control, raising concerns about meeting the tax’s tourism-related purpose.

The departure tax, officially called the International Tourist Tax, was hiked from 1,000 yen ($6.30) to 3,000 yen per trip on July 1.

The government said the increase was needed to help fund overtourism measures and other tourism-related initiatives as it seeks to boost annual foreign visitor numbers from more than 40 million in 2025 to 60 million by 2030.

The law limits the use of departure tax revenue primarily for attracting foreign visitors and improving the tourism environment.

Until now, departure tax proceeds have mainly been used for tourism promotion and the digitalization of immigration and customs procedures.

However, the fiscal 2026 initial budget included a number of projects whose connection to inbound tourism has been questioned.

WHERE THE MONEY GOES

Bear countermeasures were added to the list of projects funded by the departure tax. The budget for the program rose by 6.1 billion yen from the previous fiscal year’s initial budget to 6.2 billion yen, with 6 billion yen covered by departure tax revenue.

While bear attacks can affect tourist destinations, they primarily impact local residents. An Environment Ministry official said foreign visitors could also become victims.

The departure tax will also fund measures against invasive pests damaging sakura and other trees. Damage from designated invasive species has spread in recent years. The entire 600 million yen newly allocated for countermeasures will be financed through departure tax revenue.

“Many foreign visitors come to Japan to see cherry blossoms,” an Environment Ministry official said.

The tax is also being used to fund a new cultural property restoration center (130 million yen), a facility to preserve original manga artwork (170 million yen), and design costs for an exhibition facility for murals from the ancient Takamatsuzuka Tomb in Nara Prefecture (62 million yen).

“Promoting Japan’s culture of restoration also benefits foreign visitors,” a Cultural Affairs Agency official said.

FOREIGN TRAVELERS SHOULDER COST

Revenue from the tax is expected to increase by 81 billion yen from the previous fiscal year to 130 billion yen in fiscal 2026.

To offset the added burden on Japanese travelers, the government will use 16.4 billion yen of the additional revenue to reduce passport issuance fees. As a result, passport application fees were cut by as much as 7,000 yen for applications submitted on or after July 1.

After that offset, 64.6 billion yen of the additional revenue will effectively be borne almost entirely by foreign travelers. The government said the money has been allocated to overtourism measures and other tourism-related programs.

The departure tax was established under the International Tourist Tax Law, enacted in 2018 and introduced in January 2019. The flat fee is charged to all departing travelers regardless of nationality and added to international air and sea tickets.

Projects such as bear countermeasures, generally viewed as benefiting Japanese residents more than foreign tourists, had traditionally been funded through unrestricted general revenue. They became eligible for departure tax funding only after the July tax increase.

A Finance Ministry official said the government expanded the use of departure tax revenue after introducing measures such as free education and abolishing the old provisional gasoline tax rate without securing alternative funding sources.

Using the tax to cover programs previously financed by Japanese taxpayers frees up money for other purposes, the official said.

The approach has drawn criticism from fiscal policy experts.

Hideaki Tanaka, a professor of public finance at Meiji University, said foreign travelers may question the use of departure tax revenue for projects with only a limited connection to tourism promotion.

He added that broadening the range of eligible projects could blur the tax’s original purpose under the law.