Shanghai's instant departure tax refunds: Bringing real benefit to everyone not just 'us'

Thanks to Shanghai's instant departure tax refund service, a French tourist reaped a "surprise reward" during his May Day holiday shopping in one of the city's downtown commercial areas.

According to a report released by Huangpu District on May 6, the French traveler patronized a renowned watch shop on Nanjing Road E. during the five-day May Day holiday that started on May 1. He was amazed to discover that he could buy a latest model of Longines watch at a lower price here than in France. So he bought it without hesitation, saying he would give his wife back home a big surprise.

He didn't mean to buy any watch at first, though. He went into the shop just to ask for directions, but ended up attracted by the latest-style Longines watch on display, which he and his wife had seen in France earlier.

"I didn't expect to find this new watch in China," said the Frenchman.

He decided to buy it in Shanghai after a shop assistant explained that he could get a good price, due to the instant tax rebates for overseas travelers plus further discounts available at Huangpu District's Nanjing Road commercial neighborhood.

An instant tax rebate means inbound visitors can get a valued-added tax (VAT) refund immediately at the exact store where they buy an item, provided they meet relevant requirements. Previously, an inbound tourist would apply for a tax rebate at a port of departure.

Shanghai began to pilot tax rebates for overseas tourists in 2015. In 2019, it started to experiment with instant tax refunds. In early April this year, the practice of instant tax rebates for overseas travelers was expanded nationwide. On April 27, China further decided to lower the threshold for such tax refunds.

Now inbound tourists can apply for an instant refund if they spend no less than 200 yuan (US$27) at the same store on the same day, in addition to meeting certain requirements. The minimum amount for such a tax rebate used to be 500 yuan.

Jiefang Daily, a major newspaper based in Shanghai, reported on April 20 that Shanghai already had 587 shops qualified for tax rebate service, 284 of which could provide overseas tourists instant tax refunds. Now the numbers are growing in leaps and bounds.

The French visitor's experience reflects a broader picture of overseas tourists' "buying spree" in Huangpu District and, for that matter, across Shanghai.

Statistics from the Huangpu government show that the district's shops qualified for offering tax rebates saw their combined number of deals from May 1 to 4 surge 400 percent over the same period last year. At the same time, their total sales value soared 143 percent.

On May 5, the last day of May Day holiday, the Shanghai Municipal Commission of Commerce revealed that the city's total sales volume involving tax rebates for overseas visitors during the holiday increased 1.2 times over the same period last year, while the overall value of tax refunds expanded 1.3 times. And thanks in part to the appeal of such tax rebates, inbound consumption from April 30 to May 4 hit 455 million yuan, up 211.6 percent over the same period last year.

Certainly, an effective departure tax rebate policy to boost inbound consumption helps us cushion against the current tariff tensions to a certain extent, but more importantly, it reflects our determination to further open the market so that global trade can bring real benefit to everyone – not just "us."

A city, and a nation, that is ready to give surely has more pleasant surprises in store for friends coming from afar. If you like Chinese porcelain products, traditional Chinese medical herbs, or Chinese tea, come to Shanghai, or whichever city you like, for an unexpected reward in terms of both price and quality.