Cross-Border Shopping, E-Commerce, and Consumption Tax Revenues in Japan

Yoshimi Adachi and Hikaru Ogawa
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Yoshimi Adachi: Graduate School of Humanities, Konan University

No CIRJE-F-1204, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: This study estimates the impact of cross-border consumption and e-commerce on local consumption tax revenues for Japanese municipalities. Descriptive statistics reveal that, in 2019, expenditure through e-commerce accounts for 2.5% of household consumption expenditures, 9.1% in other municipalities in the same prefecture, and 6.1% in other prefectures, all of which are higher than the values five years ago. The main findings obtained from the panel data analysis are as follows: First, local consumption tax revenue per capita is significantly lower by approximately 0.3% in municipalities with 10% more consumption spending outside the municipalities. Second, the revision of rules for allocating consumption tax revenues in 2018 has the effect of favoring municipalities facing a consumption drain with a large population but low in-store sales.

Pages: 12 pages
Date: 2022-11
New Economics Papers: this item is included in nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2022cf1204

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