Cross-border shopping, E-commerce, and consumption tax revenues in Japan

Yoshimi Adachi () and Hikaru Ogawa
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Yoshimi Adachi: Konan University

Asia-Pacific Journal of Regional Science, 2025, vol. 9, issue 2, No 10, 605-627

Abstract: Abstract This study examines the impacts of cross-border shopping and e-commerce on local consumption tax revenues in Japanese municipalities. Employing fixed-effects regression models and instrumental variable (IV) techniques, the analysis finds that cross-border consumption is significantly associated with a reduction in municipal tax revenues: a 10% increase in cross-border consumption is linked to a 0.3–0.5% decrease in per capita tax revenue, while the overall impact of e-commerce appears to be limited. Of the two policy reforms aimed at mitigating the effects of cross-border consumption and e-commerce, the first appears to have had a measurable impact.

Keywords: Cross-border shopping; E-commerce; Local consumption tax; Digital economy (search for similar items in EconPapers)
JEL-codes: D12 H26 H71 (search for similar items in EconPapers)
Date: 2025
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Working Paper: Cross-Border Shopping, E-Commerce, and Consumption Tax Revenues in Japan (2022)
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DOI: 10.1007/s41685-025-00380-y

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