Japan Considers Abolishing Tax Reduction for Personal Imports Amid Low-Price Offensive by Chinese E-Commerce Platforms

Personal imports subject to 40% lower tax threshold
Japanese importers face unfair competition

On November 2, the Nihon Keizai Shimbun (Nikkei) reported that the Japanese government is considering abolishing the tax reduction system for personal imports, taking into account the low-price strategies of China-based e-commerce platforms such as Temu and Shein.

In Japan, goods imported for personal use are subject to a different tax threshold compared to those imported by retailers, resulting in a 40% lower consumption tax. For example, if a retailer imports a product with a regular price of 30,000 yen (approximately 270,900 won) from overseas and sells it without profit, the price including the 10% consumption tax would be 33,000 yen (about 306,000 won). However, if an individual purchases the same product directly from an overseas e-commerce site, the consumption tax is only applied to 18,000 yen (about 167,000 won), making the total price 31,800 yen (about 295,000 won), which is cheaper.

This system exists only in Japan among major countries. It was introduced in 1980 to reduce the financial burden on individuals at a time when overseas travel was uncommon. However, with the spread of the internet, the significance of the system has diminished, and criticism has arisen that it allows platforms like Temu and Shein to offer products at lower prices in Japan. As a result, the government is moving toward abolishing the system, according to Nikkei.

The newspaper pointed out, "Japanese retailers are being forced into unfair competition," and added, "There are also fraudulent practices where goods are imported for sale but falsely declared as personal use to pay less tax."

The newspaper further reported that the number of imported items declared in Japan from April 2024 to April 2025 reached approximately 200 million, about four times higher than five years ago.

The Ministry of Finance plans to include the abolition of the personal import tax reduction in the 2026 fiscal year (April 2026 to March 2027) tax reform plan, which could be finalized as early as the end of this year. In addition, the Japanese government is also reviewing the system that exempts consumption tax and other taxes on small imports valued at 10,000 yen (about 93,000 won) or less.