This blog post outlines ten crucial updates for travelers to Japan regarding money management, including changes to the tax exemption system, varying sales tax rates, new currency notes and coins, and tips for dining and withdrawing cash.
Japan is a fascinating destination, but navigating its financial landscape can be challenging for travelers. In this guide, we will explore ten important updates regarding money management in Japan that every visitor should know before their trip in 2024.
Japan's tax exemption system for visitors is undergoing significant changes. Currently, travelers can shop tax-free by presenting their passports at participating stores. However, many visitors have been reselling these tax-free goods without taking them out of the country, leading to a substantial amount of unpaid taxes. In the fiscal year 2022, it was reported that out of 57 visitors who made purchases of 100 million yen or more, only one actually exported the goods, resulting in approximately 1.85 billion yen in unpaid taxes.
To combat this issue, the Japanese government plans to implement a new system where purchases will be checked at customs when leaving the country. Visitors will need to pay the consumption tax upfront, which will be refunded via credit card or electronic money after customs verification.
Japan's consumption tax has evolved since its introduction in 1989, starting at 3% and increasing to 10% by 2019. However, not all items are subject to the full 10% rate. Certain essential goods, such as groceries and takeout food (excluding alcohol), are taxed at a reduced rate of 8%. It's important for travelers to be aware that tax rates may vary between in-store dining and takeout, as seen in establishments like Starbucks and McDonald's.
In 2021, Japan introduced new 500 yen coins and is in the process of issuing new banknotes. While old currency remains in circulation, distinguishing the new coins can be tricky. The new 500 yen coin features the word "Japan" when viewed from above and "500 yen" from below. Travelers should note that many vending machines and ticket machines may not accept these new coins, so it's advisable to have alternative payment methods ready.
Visiting shrines and temples is a significant part of Japanese culture. When making offerings, known as osaisen, it's customary to use a 5 yen coin, which symbolizes good fortune due to its hole. Conversely, the 1 yen coin is associated with distant relationships and is best avoided for offerings. Travelers should prepare a few 5 yen coins for their visits to shrines.
Credit cards are widely accepted in Japan, especially at chain stores and department stores. Visa and Mastercard are the most commonly accepted brands, while American Express and Diners Club may not be as widely recognized. Despite the growing acceptance of credit cards, many smaller establishments still prefer cash, so it's essential to carry some yen.
Travelers often accumulate coins while shopping or dining in Japan. Instead of bringing them home as souvenirs, it's more practical to use them. Convenience stores are ideal for spending coins on snacks and drinks. Additionally, travelers can enjoy the unique experience of using gachapon machines, which dispense miniature goods for just a few coins.
Dining in Japan can be more affordable during lunch hours. Many restaurants offer lower-priced lunch menus compared to dinner. For instance, a high-end restaurant may charge 30,000 yen for dinner but offer premium wagyu beef for only 1,600 yen at lunch. Travelers are encouraged to take advantage of these lunch deals, although the menu options may be limited.
Unfortunately, scams targeting foreign tourists are on the rise in Japan, particularly in urban areas like Tokyo and Osaka. Some izakaya restaurants may charge excessive fees for services or appetizers. It's advisable to confirm any additional charges with the waiter before ordering to avoid unexpected costs.
While most taxi drivers in Japan are honest, there have been reports of drivers taking longer routes to increase fares, especially in busy cities. Although this is not a widespread issue, travelers should be aware of the possibility. Public transportation, such as trains and buses, is often more convenient and cost-effective for getting around.
Despite the increasing acceptance of credit cards, many places in Japan still require cash. Travelers can exchange money at airports or banks, but using ATMs is often more convenient. Seven Bank ATMs, located in most 7-Eleven convenience stores, allow for easy cash withdrawals using credit or debit cards. It's recommended to withdraw cash as needed rather than carrying large amounts, as this reduces the risk of theft.
In conclusion, understanding these ten updates about money management in Japan will help travelers navigate their financial needs more effectively during their visit. By staying informed, visitors can enjoy a smoother and more enjoyable experience in this beautiful country.
