Hainan to Expand Tax Rebate Program to Domestic Tourists

The Hainan provincial government plans to hold a press conference in Haikou on expanding its tax rebate program to domestic tourists on March 24.

The conference will cover qualifications for rebate applications, types of goods, rebate times, rebate cap, procedures, preferential tax rates, supervision measures and other details. Hainan is expected to start a trial run of the expanded program on May 1, according to local media reports,

At present, the program only covers imported goods. Eligible tourists can claim rebates on customs duties, excise taxes and business taxes, thereby enjoying about 30 percent off the regular price.

An official from the Hainan provincial government revealed during the NPC and CPPCC sessions that the rebate cap for this program is 5,000 yuan each time, and each eligible tourist can claim rebates twice a year. Tourist can receive a partial rebate for amounts exceeding 5,000 yuan.

The tax rebate policy, aimed at attracting more tourists, has been one of Hainan's most-talked-about policies for developing the tropical island into a top international tourism destination.

The tax rebate policy took effect on Jan. 1, 2011 and offers an 11 percent rebate on total purchases, but it is largely limited to foreign tourists. Since foreign tourists only account for less than 3 percent of visitors to Hainan, the policy failed to produce desired effects.

The expanded policy also applies to domestic tourists, so it is certain to be more popular. It is expected to produce better effects and play an important role in boosting the island's tourism industry and even its entire economy.

Industry analysts believe that the expanded tax rebate policy will attract a large number of tourists to Hainan, and inject new vitality into the island's aviation, logistics, hotel and restaurant industries. In addition, it will probably lift the stock price of the China International Travel Service Corporation.