The Tokyo Metropolitan Government has finalized a plan to replace its flat-rate accommodation tax with an ad valorem system, effectively resulting in a significant tax hike for guests at hotels and inns.
On Tuesday (June 30), Kyodo News reported that Japanese Minister of Internal Affairs and Communications Yoshimasa Hayashi approved Tokyo's proposal to shift from a fixed-rate tax to a 3% ad valorem tax.
Since last year, the Tokyo Metropolitan Government has been pushing to replace the current tax of 100 to 200 yen (approximately 955 to 1,911 KRW) per night with a 3% levy based on the room rate.
While switching to a percentage-based system, the threshold for tax exemption has been raised from under 10,000 yen (approximately 95,500 KRW) to under 13,000 yen (approximately 124,200 KRW).
With the new 3% tax rate, a guest staying at a hotel charging 15,000 yen (approximately 143,300 KRW) per night will see their accommodation tax jump from the current 200 yen to 450 yen (approximately 4,300 KRW), more than doubling the cost.
The revised tax plan will take effect starting next April, and private lodging services (minpaku) will also be newly included as subjects for the tax.
Tokyo spent 30.6 billion yen (approximately 290 billion KRW) on tourism-related policies in the 2025 fiscal year (April 2025 to March 2026), but the previous tax system could only cover 6.9 billion yen (approximately 66 billion KRW) of those costs.
It is estimated that the new tax structure will generate a total of 19 billion yen (approximately 180 billion KRW) annually.
In addition to Tokyo, seven other local governments received approval from the Ministry of Internal Affairs and Communications on the same day to introduce new accommodation taxes, including Wakkanai in Hokkaido, Fujiyoshida in Yamanashi Prefecture, and Nago in Okinawa Prefecture.
These local governments have adopted either a flat rate of 200 yen per night or an ad valorem rate ranging from 1.2% to 3% of the accommodation fee.
This brings the total number of local governments in Japan with an accommodation tax to 62, a sharp increase from 17 at the end of last year.
Kyoto, a major tourist destination in Japan, has previously raised its accommodation tax to a maximum of 10,000 yen (approximately 95,500 KRW), up from a previous maximum of 1,000 yen (approximately 9,550 KRW).
According to the Mainichi Shimbun, the number of tourists visiting Kyoto last year reached 62.79 million, surpassing the 60 million mark for the first time.
Tourism spending also exceeded 2 trillion yen (approximately 19.56 trillion KRW) for the first time, surpassing the record high set the previous year to reach 2.0474 trillion yen (approximately 19.56 trillion KRW).
In response to over-tourism, Kyoto is currently discussing a differential pricing system for tourists, which would raise bus fares for visitors to 350 to 400 yen (approximately 3,344 to 3,822 KRW), double the rate charged to local residents.
(Photo: AP, Yonhap News)