Tokyo Hotel Tax Proposal Draws Criticism

by Mary Swire, Tax-News.com, Hong Kong

08 November 2001

Plans announced this week by Tokyo's governor, Shintaro Ishihara, to tax hotel accommodation in the city have drawn criticism from Tottori governor, Yoshihiro Katayama, who has argued that such a hotel tax would send out the wrong message. 'The (Tokyo) metropolitan government has to create convenient conditions so that all can visit, but the capital plans to impose taxes on hotel users, which sounds like the message, don't visit Tokyo,' he told reporters at a news conference earlier this week.

The new tax, expected to generate aditional annual revenue worth Y1.5 billion, will be charged at Y100 for visitors whose rooms cost between Y10,000 and Y14,999. A tax rate of Y200 will be levied on people whose rooms cost more than Y15,000.

In response to the tax, Katayama pledged that he would call upon the Japanese federal government and local administrative authorities in the country to cease plans for any major conferences in Tokyo. He argued: 'The hotel tax plan is inconsistent (with the idea of keeping the capital in Tokyo) because it would make a Tokyo visit more expensive. We now have to think about transferring the country's political and administrative functions to other areas.'

It is not yet known when the new tax will be imposed but the legislation is up for approval at the next session of the Tokyo metropolitan legislative assembly within the next few weeks.

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