China's financial capital Shanghai is reported to soon be joining the southern Hainan Province, in offering tax refunds to foreign visitors who purchase goods in the city.
The Shanghai Morning Post reported on Wednesday that municipal authorities have started to choose tax refund agents and related shops to implement the scheme, which is yet to be approved by the central authorities.
In 2011, Hainan Province became the first region in China to offer foreign visitors a tax refund on goods they purchased on the island.
Based on a tax rate of 11 percent, the refund has been available for foreign tourists, and for residents of Hong Kong, Macau and Taiwan.
The scheme covers those who leave within 90 days from the purchase of the goods and who have stayed no longer than 183 consecutive days previously on the island or elsewhere in China.
The scheme means a refund is available on purchases of no less than 800 RMB or about 130 US dollars. It covers products such as clothing, cosmetics, watches, jewellery and electronics; but does not include food, tobacco, alcohol or motor vehicles.
The plan to be implemented in Shanghai is expected to be similar to that of Hainan but officials have indicated that the spending threshold for a tax refund will be lowered to 500 RMB.
Shanghai's move is part of a general plan issued by the State Council, China's Cabinet, in August which called for the expansion of tax refunds to foreign tourists around the country to promote inbound tourism.
The plan required prospective regions and related governmental departments, including the State Administration of Taxation and the China National Tourism Administration, to issue detailed follow-up schemes by the end of this year.
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